Weekly: Near-term outlook on China’s steel products

• Soft construction demand to keep longs range-bound
• HRC inventories hit 3-month high, to pressure prices

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 key long steel products are likely to fluctuate within a narrow range during the week to 15 August, supported by firm raw material costs and improving speculative buying.

However, as persistent high temperatures and heavy rains continue to dampen actual demand from construction sites, the long steel market remains under pressure from the imbalance between production and consumption.

Hot-rolled coil (HRC): Prices are expected to wobble slightly over 11-15 August. A Shanghai-based source noted that local HRC inventories moved up last week as spot trading slowed, with prices hovering at high levels recently. He also cited extreme heat and cooling market sentiment as factors weighing on activity.

As of 7 August, HRC inventories held by traders in 33 cities under Mysteel’s tracking mounted for a third straight week, rising by 3.8% or 101,000 tonnes (t) w-o-w to a nearly three-month high of 2.79 million tonnes (mnt).

Cold-rolled coil (CRC): Prices are projected to experience slight volatility through 15 August, with production levels holding steady. End-users are mainly buying CRCs to cover immediate needs.

“CRC demand is steady at present, with many traders holding relatively low inventories and adopting a wait-and-watch stance on the market outlook,” a market source said.

Medium plate: Prices of medium plates are expected to move within a tight range during the week ending 15 August. Although medium plate demand remains subdued in the off-season, its inventory pressure is limited, and overall market sentiment remains stable.

Sections: Prices may stabilise this week, with some potential for gains. H-beam production is expected to rise as several mills resume operations, while traders have slowed replenishment after earlier large-scale purchases. Nonetheless, many market participants remain optimistic about near-term trends.

Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.