SteelOrbis Shanghai
Influenced by the mills' rising ex-factory prices, China's long products prices continued their upward trend over the past week, with a slight decline being seen in market inventory.
On January 12, the average price of 20 mm diameter HRB 335
rebar in the three major Chinese markets - Shanghai, Beijing and Guangzhou - was up RMB 40/mt ($5/mt) week on week to RMB 3,247/mt ($416/mt), while that of 20 mm diameter HRB400
rebar was up RMB 30/mt ($4/mt) to RMB 3,373/mt ($432/mt). Meanwhile, the average price of 6.5 mm Q235 high speed
wire rod was up RMB 37/mt ($5/mt) to RMB 3,290/mt ($422/mt).
Currently, many mills are conducting overhauling work on their
production lines, resulting in tight market supply. Moreover, the traders are active in purchasing and stocking at the present time. Given such a situation, last week many mills successively hiked ex-factory prices. According to our information, 32 mills hiked ex-factory prices for a combined total of 69 times. It is very unusual to see such frequent price adjustment by so many mills. Guangzhou Steel increased its ex-factory prices three times throughout the past week, with the mill's cumulative increase reaching RMB 140/mt ($18/mt) for
rebar and RMB 80/mt ($10/mt) for
wire rod.
Due to the insufficient market supply, the market accepted the price increase decided by the mills. Except for the market in northern
China which saw a slight decrease over the beginning of the past week, all the other regions climbed up steadily.
In addition, the continuous rise in
iron ore,
semis and other raw materials, as well as in
freight charges, also raised the costs of mills and traders, thus supporting the present price increase.
Starting from next week, migrant workers will begin returning to their hometowns, and this may show its impact in mid-February. In conclusion,
China's long products market will maintain its upward trend in the following week.