- Longs prices may strengthen due to demand pick-up
- HRC prices likely to be range-bound amid winter lull
Mysteel Global: 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 24-28 November. Downstream demand for the steel longs picked up modestly last week amid warmer market sentiment, leading to a further decline in their inventories despite rebounding production at mills. Construction steel prices are set to draw support from output cuts induced by thinning steel margins and traders’ confidence to hold firm offers amid high raw material costs.
Combined inventories of rebar and wire rod held by traders in commercial warehouses in 35 Chinese cities under Mysteel’s tracking stood at 4.62 million tonnes (mnt) as of 20 November, down by 4.3% or 205,100 t w-o-w, marking the sixth consecutive w-o-w drop.
Hot-rolled coil: HRC prices are expected to be range-bound during this week to 28 November. The oversupply in the domestic HRC market is likely to persist as downstream demand starts to contract during the winter lull, raising cautious sentiment among market participants.
Cold-rolled coil: CRC prices are projected to remain weak this week. CRC production rose again last week, hovering at a relatively high level. Traders can only earn mild profit margins from CRC sales as recent optimism in the CRC market has faded and supply-demand dynamics return to the spotlight, strengthening their cautious stances toward the near-term market.
Medium plate: Prices of medium plates are likely to fluctuate in a narrow range through 28 November. The output of medium plates rebounded slightly amid upbeat market sentiment early last week, but downstream demand remained weak. As a result, some traders in East China adopted an aggressive discounting strategy to facilitate sales. The overall sentiment remains cautious, with traders mainly focusing on offloading their plate stocks in hand.
Sections: Section prices are expected to dip further over the week from 24-28 November. Production of sections is expected to remain largely steady this week, while demand remains subdued due to sluggish downstream projects. Moreover, the imbalance between supply and demand may intensify in the short term due to lower temperatures, which could drive more end-users to the sidelines and add downside pressure on steel sections prices.
Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.
Leave a Reply