Near-term outlook on China's steel products

• Longs to strengthen as restocking picks up
  
  
• HRCs may stay range-bound, CRCs to soften
  
  

Mysteel Global: Below is the brief near-term outlook for five key steel products Mysteel shares on a weekly basis, drawing upon the results of related surveys and communication with Chinese market participants.

Rebars, wire rods: Prices of the two long steel products may strengthen over 28-30 April, chiefly due to replenishment needs among end-users ahead of the country's Labour Day holiday over 1-5 May, along with market expectations for the roll-out of favourable macroeconomic policies.

Hot-rolled coils: Prices are expected to remain range-bound in the week through 30 April. "While HRC producers are maintaining high production levels, thanks to their healthy profit margins, stocks of this flat steel product may continue to thin as the holiday break gets closer," a North China-based source predicts.

As of 24 April, HRC inventories held by traders in 33 cities under Mysteel's tracking declined for the eighth consecutive week, by 2.4% or 68,600 t w-o-w to a three-month low of 2.83 million tonnes (mnt).

Cold-rolled coils: Prices are likely to soften amid volatility in the week ending 30 April. Most end-users have been procuring material to meet their immediate demand, leading to feeble trading in the spot market. Consequently, CRC traders face pressure to destock and appear largely pessimistic about near-term market trends.

CRC stocks held by traders in the 26 Chinese cities Mysteel monitors mounted for the fourth consecutive week in the week ending 24 April, by 0.3% or 3,200 t w-o-w to 1.27 mnt, a 1.5-month high.

Medium plates: Prices are forecasted to move up modestly during 28-30 April, as restocking activities from downstream users pick up. Traders are optimistic about the market outlook with low inventories at hand.

Stocks of medium plates at commercial warehouses in the 31 Chinese cities Mysteel follows continued the steady fall since mid-February, down by 2.6% or 26,200 t w-o-w to 997,000 t as of 24 April, the lowest since early January 2022.

Sections: Prices of steel sections may fluctuate downward this week due to persistently low market confidence and a weaker-than-expected improvement in demand from building contractors.

Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.