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.
Rebar & wire rod: Prices of long steel may stay range-bound this week, as demand from end-users will weaken further with the surge in COVID infections and low temperatures in many regions of China.
Although some steel mills in East China have introduced their policies for winter restocking, the prices are higher than the market expectation. Consequently, many market participants are in no hurry to build up their stocks and will wait for the prices to decline to reduce their costs.
Hot-rolled coil: This price may fluctuate during the week ending December 30, as the imbalance between supply and demand may intensify with steel demand weakening further amid surging COVID new cases across China.
However, the decrease in mills’ HRC output may be limited despite thin demand. Over December 15-21, total output of HRC among 37 Chinese flat steelmakers under Mysteel’s tracking reached 3.01 million tonnes, down 3.5% on week.
Cold-rolled coil: The price is expected to remain range-bound over December 26-30 due to weakening demand. Many downstream users have to stay at home due to the rising number of COVID infections, and operations of downstream industries have also been impacted by the pandemic, resulting in poor transactions in the physical market.
Medium plate: The price may maintain the downtrend during the week ending December 31, as Chinese traders will face more pressure on sales given more arrivals to warehouses and persistent lacklustre demand from downstream users.
Sections: Prices may soften further on oversupply this week. Demand from downstream users is expected to remain poor during the traditional low-season for steel consumption, while production of integrated mills and re-rollers may stay high, putting more pressure on steel prices.
Written by Nancy Zheng, zhengmm@mysteel.com
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.
Leave a Reply