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 major long steel products are projected to strengthen amid positive market expectations over September 15-19. Meanwhile, thinning profit margins may drive down mills’ production volume slightly, slowing stock accumulation and pushing market fundamentals to recover.
Rebar production among the 137 Chinese steel producers under Mysteel’s weekly survey dropped for the second consecutive week over September 4-10, down by a larger 3.1% or 67,500 tonnes on week to sit at 2.12 million tonnes.
Hot-rolled coil: HRC prices are expected to remain rangebound through September 19. Relatively low stocks and high costs of purchases encourage many HRC traders to keep offers firm, but the overall trading in the spot market is still modest amid a slow downstream demand recovery.
Cold-rolled coil: CRC prices are estimated to be slightly volatile during the week to September 19. Steady production and subdued demand continue to weaken the HRC market fundamentals. Market sources note that most end-users adopt a cautious stance towards CRC procurement, only taking enough tonnage to meet their immediate needs.
Medium plate: Prices of medium plates are projected to fluctuate in a narrow range over September 15-19. Downstream demand remains lackluster, and the medium plate stocks held by traders start to show signs of accumulation, fueling a cautious outlook for the near-term market.
Inventories of medium plates piled in the commercial warehouses of Chinese traders in the 132 cities under Mysteel’s tracking rose by 5.4% over September 5-11 to reach 2.22 million tonnes, a nearly 5.5-month high.
Section: Section prices are estimated to dip slightly in the following week. Rolling capacity utilization rate of sections mills edged up mildly last week, keeping output at a relatively high level. Currently, most end-users only make purchases on a need-to basis and favor low-priced cargoes, further weighing on market fundamentals amid the absence of positive macroeconomic stimulus.
Note: This article has been written in accordance with an article exchange agreement between BigMint and MySteel Global.
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