- Long steel prices gain on seasonal restocking demand
- Flat steel prices decline on high inventories, weak demand
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 these two major long steel items are expected to gain ground over October 12-16. As October marks a traditional peak month for steel consumption in China, restocking demand from downstream building contractors is likely to persist in the near term, easing inventory pressure and lending some support to long steel prices.
On the other hand, lingering concerns about softening prices of raw materials like iron ore and coke could improve the profitability of domestic steelmakers, which may lead to a slight increase in their long steel output and add supply pressure in the short run.
Hot-rolled coil: Chinese HRC prices are expected to extend small drops this week against elevated inventory levels. Most market participants remain cautious towards the near-term market as the recovery speed of downstream demand after the National Day holiday has failed to meet market expectations. Most end-users opt to make HRC purchases only to meet their immediate production needs.
Cold-rolled coil: CRC prices are likely to decline slightly over the week ending October 16 under high inventory pressure. Downstream demand stays subdued as end-users continue to maintain a rigid restocking pace. Against this backdrop, some traders have quietly lowered their offers to secure deals, although their already thin profit margins limit the scope for further discounts.
Medium plate: Medium plate prices are likely to post mild drops over October 12-16. Elevated inventory pressure after the National Day holiday break is expected to persist this week due to lower-than-expected demand, which could drive down domestic medium plate prices together with fading cost-side support. Most traders are focusing on liquidating their plate stocks in hand, with some of them offering discounts to facilitate sales.
Sections: Steel section prices are likely to fluctuate within a narrow range over October 12-16 amid a weak balance between supply and demand. Infrastructure and construction projects are expected to pick up pace in the mild weather, which may lead to recovering downstream demand, while high inventory levels and dropping billet prices are likely to pose downside pressure on section prices.
Note: This article is published as part of a content exchange agreement between Mysteel Global and BigMint.
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