Near-term outlook on China's key steel products

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

Rebar & wire rod: The prices of these longs may hover over June 28-July 2, as the room for further declines is limited on the persistently high production costs, even though that rebar stocks in the commercial warehouses in China’s 132 cities increased for the second week, up 1.3% on week to 11 million tonnes as of June 24.

Hot-rolled coil: The flat steel price may soften in the week ending July 2, mainly driven by weakening demand while further rises in the stocks, as by June 24, HRC stocks in the commercial warehouses in China’s 55 cities increased for the fourth week, up 3.7% on week to 3.8 million tonnes.

Cold-rolled coil: The price is likely to slip in the week to July 2, as the market has entered a slack consumption season.

Medium plate: The price may dip modestly over June 28-July 2, mainly prompted by the softening demand, as shown in the accumulation of stocks at both the 184 steel mills and the commercial warehouses in 65 Chinese cities.

Sections: The price is forecast to hover in the week ending July 2, as most mills are likely to firm ex-works prices with narrowing profit margins and possible less output from re-rollers such as Tangshan. As of June 27, the price of the Q235 150mm square billet in Tangshan, North China’s Hebei province, fell by Yuan 40/tonne ($6.2/t) on week to Yuan 4,860/t EXW including the 13% VAT.

Written by Villanelle Xia, xiayi@mysteel.com

This article has been published under an article exchange agreement between Mysteel Global and SteelMint.