- Slack sales, rising stocks to weigh on HRCs
- Longs tags to soften amid bearish sentiment
Mysteel: 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 these two long steel products are expected to soften during the week through 20 June amid weakening downstream demand and persistent bearish sentiment. In tandem, output of the steel longs may hover at low levels, though.
Rebar production among the 137 steel mills Mysteel tracks across China declined for the third successive week, by 5% or 108,900 tonnes (t) w-o-w, to a three-month low of 2.08 million tonnes (mnt) during June 5-11.
Hot-rolled coil: HRC prices are likely to decline further in the week through 20 June, mainly due to the imbalance between production and demand. A source in Guangdong in South China reported slack sales of the flat steel product and a further build-up in stocks.
As of 12 June, HRC stockpiles at commercial warehouses in the 33 Chinese cities under Mysteel’s coverage mounted for the second week, rising by 1.7% or 45,900 t w-o-w to 2.69 mnt.
Cold-rolled coil: CRC prices are forecast to fall slightly in the week ending June 20. CRC output among the 29 mills Mysteel follows nationwide is likely to remain high at around 870,000-880,000 t this week, while overall demand may stay lacklustre.
Medium plate: Prices are projected to weaken in the week during 16-20 June, chiefly due to the seasonal lull in demand. End-users show little interest in stocking up on medium plates, while traders are also cautious, with many holding a pessimistic view of future market trends.
Stocks of medium plates held by traders in 31 cities Mysteel monitors nationwide amounted to 954,200 t as of 12 June, up 2.9% or 26,700 t w-o-w.
Sections: Steel section prices may head south this week, dragged by high output and bleak spot trading. With weak fundamentals and no macro-level support measures in sight, a near-term recovery remains unlikely.
Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.
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