- Long steel prices to gain amid falling output
- HRC tags to dip on rising stocks, winter lull
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 the two major long steel items are forecasted to strengthen over 17-21 November. Market fundamentals recovered last week as inventories retreated amid declining output and slightly rising demand. Production of the two construction steel products is likely to extend its downtrend this week as some steel mills have announced to conduct maintenance on steelmaking facilities, strengthening market expectations for a further recovery in long steel fundamentals.
Combined output of rebar and wire rod among the 137 steel mills under Mysteel’s tracking fell by the fifth consecutive week over 6-12 November, moving down by 2.5% or 122,600 tonnes (t) w-o-w to 4.83 million tonnes (mnt), the lowest level in nearly four months.
Hot-rolled coil: HRC prices are expected to dip slightly during the week ending 21 November amid its weakening market fundamentals. HRC inventories are predicted to accumulate higher as downstream demand for the flat steel item may contract further amid the coming winter lull and rising caution among market participants.
Cold-rolled coil: CRC prices are projected to remain weak this week. CRC production edged up last week, with a rebound in mills’ rolling capacity utilisation rates. On the demand side, CRC consumption in North China may drop slightly amid lower construction activity during the winter. Spot trading of CRC remains lacklustre, as most end-users hold a cautious stance, purchasing only for immediate production needs, sources in East China informed Mysteel.
Medium plate: Prices of medium plates are likely to fluctuate in a small range through 21 November. Some traders continue to hold cautious stances toward the near-term market and opt to clear their plate stocks by offering large discounts as demand remains subdued in the winter lull for the steel sector.
Sections: Section prices are expected to dip further over the week from 17-21 November. Production for sections is likely to keep steady as high levels of mill inventory suppresses their production enthusiasm, while end-users only restock on a need-to basis. In order to liquidate inventories to reduce operational risks, most traders have reduced their offers to facilitate sales, which may weigh on sections prices to some extent.
Note: This article has been written in accordance with an article exchange agreement between Mysteel Global and BigMint.
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