- Increase in output, lacklustre demand to weigh on HRC tags
- Long tags to stay rangebound amid slack demand and supply tightness
Mysteel: 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 these two long steel products are expected to remain narrowly rangebound during June 23-27, as both supply and demand stay subdued. Although the current stock levels of these steel longs are already low, many traders are trying to clear their inventories, primarily in response to sluggish downstream demand during the hot and humid summer.
Hot-rolled coil: HRC prices are likely to soften during the week ending June 27 due to the ongoing imbalance between supply and demand. According to a Shanghai-based source, HRC shipments from northern regions are gradually arriving in the local market, which could soon lead to a buildup in retail inventories.
Mysteel’s latest survey showed that weekly HRC output among the 37 steelmakers it tracks across China reached 3.25 million tonnes over June 12-18, up 0.3% from the previous week and 1.5% on year.
Cold-rolled coil: CRC prices are projected to fluctuate mildly this week. “On one hand, there’s limited room for further declines due to already low prices. On the other hand, a seasonal lull in demand is capping any significant upward momentum,” an industry analyst explained.
Medium plate: Prices of medium plates are expected to decline modestly over the week to June 27. With steel consumption at a seasonal low, end-users are reluctant to replenish stocks. Many steel plate traders are also pessimistic about the near-term market outlook, especially as their inventories of plates continue to rise.
Stocks of medium plates held by traders in 31 cities Mysteel monitors nationwide grew for the third straight week last week, up by 1.2% or 11300 tonnes on week to hit a one-month high of 965,500 tonnes as of June 19.
Sections: Section prices are likely to trend downward this week amid weakening supply and demand. A source in Tangshan noted that poor fundamentals and cautious market sentiment are weighing on prices of steel sections. He also pointed out that volatility in steel futures could further impact the sections market.
Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.
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