- Longs prices to remain largely stable on production cuts, cost support
- High coke prices may keep HRC steady despite inventory build-up
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: China’s prices of the two major long steel items are expected to fluctuate around current levels over 13-17 July. Widening losses have prompted more steelmakers to conduct maintenance on their steelmaking facilities, easing supply pressure and supporting a rebound in long steel prices last week alongside warming sentiment.
Most traders are likely to firm their offer prices for steel longs this week amid steady cost support. While inventory pressure remains relatively mild due to the low volume of actual cargo delivery in July, severe typhoon impacts and persistent high temperatures will continue to weigh on downstream demand over the ongoing summer lull.
Hot-rolled coil: Chinese hot-rolled coil (HRC) prices are expected to hold largely steady this week. End-user demand has been pressured by torrential rainfall and strong gales caused by recent typhoons, which have greatly disrupted cargo deliveries. This has led to inventory build-ups in trading warehouses and intensified market caution. However, elevated coking coal and coke costs are expected to continue providing support to steel prices.
HRC inventories held in commercial warehouses in 33 Chinese cities under Mysteel’s coverage totalled 3.61 million tonnes (mnt) as of 9 July, up for the third consecutive week by 0.8% or 27,700 tonnes (t) on week.
Cold-rolled coil: CRC prices are likely to fluctuate within a narrow band over the week ending 17 July. Market sources note that traders are focusing on clearing stocks in hand amid subdued demand for CRC from major downstream sectors, but they also opt to hold onto their offering prices as their current inventory pressure remains low.
Medium plate: Medium plate prices are expected to stay rangebound over 13-17 July. Most traders are adopting a cautious stance in the near term, prioritising inventory reduction as stocks have edged higher and spot trading remains sluggish during the summer off-season.
Sections: Steel section prices are likely to post small declines over 13-17 July. Limited funding availability and hot weather conditions have constricted project processes and downstream demand, while a slight increase in output has led to inventory accumulation and strengthened market pessimism, putting further pressure on section prices in the near term.
Note: This article is published as part of a content exchange agreement between Mysteel Global and BigMint.
Leave a Reply