Chinese long product price slide tapers off – for now

Chinese long product price slide tapers off – for now

Although construction steel prices overall trended downward during the past week, prices for many varieties ended the week on a positive note. Prices endured large drops early in the week, especially in Beijing and Shanghai. By Thursday prices had stopped sliding, and many experienced rebounds on Friday, November 11. The market condition in Guangzhou was relatively steady. The general business activity was at a normal level all throughout the past week, and it was especially brisk in the middle of the week. Compared to the previous week, the average market price and decline in China’s major markets were as follows: 20mm HRB335 rebar was down RMB 10/mt to RMB 2’987/mt ($370); 20mm HRB400 rebar was down RMB 34/mt to RMB 3’183/mt ($394); and 6.5mm Q235 high-speed wire rod was down RMB 7/mt to RMB 3’070/mt ($380). One reason the price slide tapered off toward the end of the week was because the market inventory level was low and some specifications were in short supply. The fact that few batches of products arrived in the market over the past week helped prices stop their skid. Therefore, the price decline came to an end on Thursday, November 10, and then bounced back. A majority of traders indicate that although market inventory is currently low, prices might decline continuously as steelmakers, who have high inventory levels, dispatch their products to the market. However, a minority of traders think that the low market inventory will help to push prices up. The increase in market prices towards the end of this past week can be attributed to the decreasing market inventory and fewer new batches of products, which will continue to be the case this week. In light of the slightly declining billet prices in northern China, construction steel prices there were also in a downward trend. Some traders adopted a price-protective sales policy. Thus, the general prices in China’s main markets will possibly go up by a small amount before new batches of products arrive in southern China from the north. Nevertheless, the increase range will not be large because demand, except that of end users, has generally been soft. SteelOrbis Shanghai