Chinese long product market anticipates larger fluctuations

SteelOrbis Shanghai The rapid price jump of the last two weeks was hard for end-users to accept, with the result that Chinese long product prices began to decrease at the end of last week. The increase in market prices, led some steel mills to hike their ex-factory prices, which in turn pushed the market prices up further over the last two weeks. The end-users not accept the rising prices and most of them decıded to bide their time. Influenced by this, traders decided to reduce their prices. On September 8, the average price of 20 mm diameter HRB335 rebar in China's three major markets, Shanghai, Beijing and Guangzhou increased RMB 50/mt ($6) to RMB 3,123/mt ($405), that of 20 mm diameter HRB400 rebar increased RMB 56/mt ($7) to RMB 3,233/mt ($406). The average price of 6.5 mm Q235 high speed wire rod increased RMB 43/mt ($5) to RMB 3,290/mt ($414). Nevertheless, the current market inventory is still at a relatively low level, and the prices of semi-finished steel are steady. Market players think that the price decline of the last few days is just a normal adjustment to the previous sharp price increase. Therefore, no large decrease is expected in the short term, and market prices may rise in the future. The total increase range since late July, when Chinese long product prices became stable and rebounded, is around RMB 160/mt ($20), creating a certain profit range for steel mills and traders. The Chinese long products market is currently more or less stable. In the short term, the market will maintain its trend with slight fluctuations, but with the growth in both supply and demand later, the size of the fluctuations is expected to increase.