Slight rebound for Chinese long product prices

SteelOrbis Shanghai Supported by the costs, Chinese long product prices saw a slight rebound throughout last week, with the still sluggish commercial activity and no evident changes in national market inventory. Steel mills continued to reduce their production and some of them began to hike the ex-factory prices by a small margin. On August 4, the average price of 20 mm diameter HRB 335 rebar in three major local markets of China increased RMB 30/mt ($4) week on week to RMB 2,973/mt ($373), and that of 20 mm diameter HRB 400 rebar increased RMB 10/mt ($1) to RMB 3,097/mt ($389). The average price of 6.5 mm Q235 high speed wire rod increased RMB 20/mt ($3) to RMB 3,177/mt ($399). Since the market prices have already bottomed out, the overall trend tends to be stable. The prices in eastern and southwestern regions saw a continuous rise throughout last week due to the low price level. However, the prices in northeastern regions continued to decline due to the arrival of some low-priced products. The prices in middle southern, southern China and other regions were relatively stable. Since late-July, Chinese long steel prices have seen a slow decrease. Market prices in some regions have even increased slightly, which is normal after bottoming out. Additionally, the stability of steel mills' price determinations for August also provides a favorable support to the market. The recent trend indicated that the current market price level is close to buyers' expectations, which caused the commercial activity to turn better. Driven by the brisk demand on narrow steel strip, the common carbon billet price in Tangshan saw a slight increase and increased cost pressure for long steelmakers, too. Under the pressure of costs, steel mills prefer reducing or even stopping production instead of lowering the sales prices. However, due to the bearish demand at present, prices are not expected to see a sharp increase. Nevertheless, with the gradually increasing demand, Chinese long products prices are likely to go up. The prices are estimated to remain in an upward trend in late-August.