- Cold weather curbs end-user consumption
- Inventory build-up pressures prices
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 forecast to dip over January 19-23 after a modest gain last week. Mysteel assessed the national price of HRB400E 20mm dia rebar at Yuan 3,351/tonne ($481/t) on January 16, higher by Yuan 14/t from the level on January 9.
Market fundamentals for the two long steels are expected to weaken this week as mills’ long steel output may continue to rise while downstream demand will likely stay subdued, with end-users showing low interest for replenishment and speculative appetite waning amid cooler market sentiment.
Hot-rolled coil: HRC prices are expected to post a mild decline this week. In North China, end-users are expected to consume less HRC due to colder temperatures. But some projects in the country’s other region are in a rush to meet deadlines ahead of the Chinese New Year holiday in mid-February, giving some support to HRC demand. Overall, HRC inventories are expected to accumulate rapidly this week amid rising production levels, weighing on HRC prices.
Cold-rolled coil: CRC prices are projected to slip slightly this week. Steel mills have curbed their production levels for CRC, resulting in lower stocks of the flat steel product held by steelmakers. But most traders hold a cautious stance towards the near-term market as downstream demand remains lackluster and most deals have been closed at low prices, which may pose downside pressure on CRC prices.
Medium plate: Prices of medium plates are likely to fluctuate in a small range through January 23. Downstream demand performed better than expected in some regional markets last week, but most traders are still cautious about the near-term market trend, and some are willing to offer discounts to clear their stocks.
Sections: Section prices are expected to be rangebound over January 19-23. Oversupply is set to persist in the section steel market in the short term, as the capacity utilization rate for producing sections stays largely steady, while demand remains soft. But steelmakers want to hold firm on offers for sections to avoid negative profit margins, which may stabilize the prices.
Note: This article has been written in accordance with an article exchange agreement between Mysteel Global and BigMint .
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