- Holiday-driven demand slowdown caps price movements
- Rising inventories reinforce cautious market sentiment
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 see limited change over February 9-13. As most traders and downstream end-users will leave the market this week for the Chinese New Year (CNY) holiday starting this Sunday, market activity is likely to gradually quieten down.
With downstream demand for the two long steel items having contracted to year-low levels, their inventories accumulate higher before the holiday. Combined inventories of rebar and wire rod held by traders in their commercial warehouses in the 35 Chinese cities under Mysteel’s tracking climbed by 6.8% or 446,700 tonnes on week to reach 4.21 million tonnes as of February 4.
Hot-rolled coil: HRC prices are expected to be stable this week. With the CNY holiday being just around the corner, trading sentiment for the HRC market cooled significantly. Concluded deals mainly concentrate on speculative buying of low-priced cargoes, as most end-users have halted production to enjoy the holiday.
Cold-rolled coil: CRC prices are projected to decline slightly this week. Market fundamentals for this flat steel weakened further last week, with increased CRC output leading to higher inventory levels. Although some traders attempted to offer discounts to facilitate sales, spot CRC trading remained lackluster in the past week. Most downstream buyers have finished their restocking before the CNY holiday.
Medium plate: Prices of medium plates are likely to stay weak through February 13. As demand for the flat steel item contracts further with the upcoming CNY holiday, market participants hold a wary stance toward the near-term market and are expected to lower offer prices to liquidate stocks.
Sections: Section prices are expected to be largely steady over February 9-13 as most market participants’ focus has turned to section demand after the CNY holiday as most traders and end-users have been on their way home, while logistics services are also expected to halt operation gradually this week.
Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint
Leave a Reply