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 ease over November 1-5, mainly driven by the gloomy sentiment in the domestic commodities market in general especially when Beijing is determined to bring domestic coal price back to a reasonable level.

Besides, rebar stocks at China’s 137 steelmakers under Mysteel’s tracking increased for the second week, up 7.3% on week to 2.6 million tonnes as of October 28, indicating that supply will not pose much pressure while demand will reduce in winter months.

• Hot-rolled coil: This price may slip in the week ending November 5, as most end-users have been procuring only for immediate needs, though pressure from stocks will be minimal, as by October 28, HRC stocks in the commercial warehouses of China’s 55 cities under Mysteel’s survey declined for the third week by another 4.4% on week to 3.6 million tonnes.
• Cold-rolled coil: The price may decline modestly in the week to November 5, as most end-users have been inactive in buying while stocks at the traders has been declining though at a slower pace than expected, as by October 28, CRC stocks in the commercial warehouses of China’s 29 cities under Mysteel’s survey eased for the second week by another 0.4% on week to 1.9 million tonnes.
• Medium plate: The price is likely to rebound over November 1-5, as demand from end-users is forecast to pick up with easing power rationing, along with limited availability in some regions of China.
• Sections: The price is expected to lose some steam in the week ending November 5, as steelmakers have trimmed ex-works prices, and traders have been willing to sell off some stocks on bearish sentiment. The Q235 150mm square billet price in North China’s Tangshan under Mysteel’s assessment, on the other hand, fell for the third week as of October 31, or down another Yuan 90/tonne ($14/t) on week to Yuan 4,900/t EXW including the VAT.

Written by Villanelle Xia, xiayi@mysteel.com
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.