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: The prices of the two long steel items are forecast to weaken further over 18 -22 March due to the downward trajectory seen in steelmaking raw materials prices and negative market sentiment, despite the fact that mills’ production of these longs declined last week, and demand has also improved. Market sources predict there will be limited room for mills to keep cutting long steel output.
Hot-rolled coil: This price is likely to rebound moderately before the end of this month, as retail stocks of hot-rolled coils have shown signs of decline in some regions across the country. As of 14 March, total inventories at commercial warehouses in the 33 Chinese cities Mysteel tracks mounted though at a slower pace of 24,100 tonnes (t) on week to 3.51 million tonnes (mnt), as against the 92,700 t rise in the prior week.
Cold-rolled coil: This price may soften in the week through 22 March, due to the mounting imbalance between production and demand of cold-rolled coils. CRC output among the 29 steelmakers Mysteel follows nationwide may reach around 850,000 t this week as these mills have no plan for maintenance, while spot trading may stay tepid on bearish market mood.
Medium plate: This price is estimated to slightly fluctuate in the week ending 22 March. A North China-based source noted that the stocks of medium plate have hovered high, demand from end-users remained slack and overall sentiment in the market stayed bleak.
By 14 March, its inventories at traders’ warehouses in the 31 cities Mysteel surveys grew for the ninth week in a row, up by 54,500 t on week to hit 1.62 mnt, the highest since late February 2014.
Sections: The sections’ prices may show a turning point and rebound this week, as many mills have suspended their production for maintenance stoppage, easing the contradiction in fundamentals. Meanwhile, demand for section steel may also grow with the work on downstream construction projects picking up gradually, which will lend some support to the prices of sections.
Note: This article has been written in accordance with an article exchange agreement between MySteel Global and BigMint.