- Long steel prices to rise on demand recovery, lower output
- HRC, CRC price rally may pause as buyers turn cautious
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 expected to strengthen over 11-15 May, primarily due to expectations of recovering market fundamentals. Downstream demand is projected to pick up further amid favourable weather conditions for outdoor construction activities, while national long steel output may contract further as some steelmakers conduct maintenance stoppages on their rolling lines due to profit losses. As such, construction steel inventories are likely to decline at a faster pace this week.
Combined stocks of rebar and wire rod held in commercial warehouses in 35 Chinese cities under Mysteel’s tracking fell for the eighth week in a row, down by 1.5% or 97,300 tonnes (t) on week to sit at 6.22 million tonnes (mnt) by 7 May.
Hot-rolled coil: Hot-rolled coil (HRC) prices are projected to fluctuate within a narrow band this week. Strong transactions in the physical market last week buoyed market sentiment and substantially lifted spot HRC prices, but caution is expected to pervade this week as relatively high prices for the flat steel product may dampen end-users’ interest in replenishment to some extent.
Cold-rolled coil: Cold-rolled coil (CRC) prices are likely to be largely stable in the week ending 15 May. Price rises encouraged steelmakers to ramp up CRC production slightly last week, while stockpiles of this item at both steel mills and trading warehouses declined further amid smooth trading. However, traders are expected to keep focusing on liquidating their ample inventories, which may limit further price gains.
Medium plate: Prices of medium plates are forecast to strengthen further throughout 15 May. But the slow pace of destocking is expected to cause most traders to stay wary towards the near-term medium plate market and continue to focus on offloading their existing stocks.
Sections: Prices of steel sections are likely to post small gains over 11-15 May, mainly buoyed by a steady recovery in downstream demand. End-users and traders are actively replenishing stocks, with some expressing interest in seeking mainstream mid-range resources. This reflects strong demand from downstream sectors and increasing market acceptance, showcasing a strengthening market resilience.
Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.
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