China: Near-term outlook on key steel products

• Prices of all steel products to rise modestly through 20 Mar
• Recovering demand, higher costs to support price uptrend

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 forecast to log a mild rise over 16-20 March. The gradual recovery of downstream demand indicates certain resilience in rebar fundamentals despite rising inventories. In addition, the impact of firmer iron ore prices is expected to remain this week, providing short-term cost support for rebar prices.

Hot-rolled coil: HRC prices are projected to post a small gain this week. HRC inventories trended downwards amid demand recovery last week after accumulating for five consecutive weeks. Consequently, most manufacturing enterprises are expected to ramp up production to normal levels and replenish HRC stocks. In addition, rising raw material prices could also support HRC prices from the cost side.

HRC inventories held by traders among 55 Chinese cities under Mysteel’s tracking edged down by a small 0.16% or 8,600 tonnes (t) on week to 5.18 million tonnes (mnt) as of 12 March.

Cold-rolled coil: CRC prices are projected to see modest rises in the week ending 20 March. Recovering downstream demand and strengthening futures prices have lifted overall market sentiment and elevated spot prices of the coil. Traders generally hold a positive stance, though the near-term market still depends on the recovering pace of CRC demand as well as macro signals.

Medium plate: Prices of medium plates are likely to climb slightly throughout 20 March. Spot trading for medium plates rebounded to some extent last week, but market participants are expected to adopt a cautious stance this week due to the slow pace of destocking and continue to focus on clearing their stocks.

Sections: Prices of steel sections are likely to gain, albeit marginally, over 16-20 March. Most re-rollers are willing to lift their offers for steel sections due to strong cost support from higher billet prices. However, the room for the price gain would be constrained by the slow recovering pace of downstream demand.

Note: This article has been published in accordance with a content exchange agreement between Mysteel Global and BigMint.