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

• Long steel prices may climb up amid reduced output
• HRCs to stay range-bound on slow demand recovery

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 trend higher over 8-12 September. Mills’ long steel output may decline with thinning profit margins, and traders’ inventories are expected to build at a slower pace. Meanwhile, market sentiment remains broadly cautious as end-user demand has yet to see a clear recovery.

Hot-rolled coil: HRC prices are expected to stay range-bound during the week to 12 September. A South China-based trader said sentiment has improved slightly, but downstream demand recovery remains slow.

By 4 September, HRC stocks at traders’ warehouses in the 33 Chinese cities sampled by Mysteel hit a five-month high of 2.94 million tonnes (mnt), up by 3% or 85,800 tonnes (t) w-o-w and marking a three-week rise.

Cold-rolled coil: CRC prices are estimated to soften in the week ending 12 September, as CRC production among the 29 producers Mysteel tracks across China may hover steady at 850,000-860,000 t this week, while demand is more likely to stay tepid.

“With demand recovery falling short of expectations and inventories climbing, traders are cautious about the outlook,” a source noted.

CRC inventories held by traders in 26 cities Mysteel follows hit a one-year high at 1.4 mnt by 14 September, up by 2.8% or 38,300 t from a week earlier.

Medium plate: Prices of medium plates are expected to mildly fluctuate through 12 September, as both demand and supply remain weak.

Stocks of medium plate held among traders in 31 cities Mysteel checks grew for the third straight week last week, by 1.7% or 17,600 t w-o-w to a five-month high of 1.03 mnt by 4 September.

Sections: Section prices may decrease this week, as production is set to rise after most re-rollers in North China’s Tangshan resumed operations late last week, while demand from end-users may recover only slowly.

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