- HRC prices hold steady amid cautious buying
- Pre-holiday restocking may support long steel prices
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. This week’s outlook covers only three trading days, as China’s National Day holiday begins on 1 October .
Rebar & wire rod: China’s prices of these two major long steel items are expected to fluctuate within a narrow range over 28-30 September , as weakening cost support may be countered by lower supply.
On one hand, deepening losses are expected to prompt Chinese steelmakers to further reduce hot metal output, which may weaken the supply-demand fundamentals of major steelmaking raw materials including iron ore and coking coal, putting pressure on steel prices.
On the other hand, long steel production fell to a yearly low last week, indicating limited supply pressure in the domestic market. Construction steel inventories are likely to extend their declines ahead of the National Day holiday should pre-holiday restocking demand continue over these three trading days, lending some support to long steel prices.
Hot-rolled coil: Chinese HRC prices are expected to move sideways this week. Inventory pressure eased somewhat as spot transactions improved last week following concentrated replenishment by end-users. However, actual demand remains weak, prompting most buyers to stay cautious about the near-term market outlook.
Cold-rolled coil: CRC prices are likely to remain range-bound over the week ending September 30. Spot trading ahead of the Mid-Autumn Festival was weaker than expected, while CRC inventories increased further last week. As a result, market sentiment remained subdued, with traders continuing to prioritize destocking.
CRC stocks held by traders in 29 Chinese cities under Mysteel’s tracking edged up for the second consecutive week, though inventories increased by a marginal 7,900 tonnes (t) to 2.32 million tonnes (mnt) as of 24 September .
Notably, CRC was the only product among the five major carbon steel items including rebar, wire rod, HRC, CRC and medium plate to record an on-week inventory increase last week.
Medium plate: Medium plate prices are expected to decline slightly over 28-30 September amid subdued downstream demand. Against this backdrop, traders may offer discounts to accelerate sales of certain specifications, while relatively stable cost support is expected to limit the downside for medium plate prices in the near term.
Sections: Steel section prices are likely to edge higher over 28-30 September , supported by improving market fundamentals. Lower production amid mills’ heavy losses, together with pre-holiday restocking and relatively firm billet prices, is expected to provide support to section prices in the near term.
Note: This article is published as part of a content exchange agreement between Mysteel Global and BigMint.
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