Remaining on its declining trend, the Chinese long products market registered a total decrease of RMB 100/mt ($15/mt) over the past week. Due to recent political decisions, the steel futures market in China has dropped considerably, exerting a significant impact on the local spot market. Meanwhile, rebar inventory climbed up by a small margin during the past week, whereas wire rod inventory slipped slightly in a context of normal levels of trading.
Product name |
Specification |
Category |
Average price (RMB/mt) |
Price ($/mt) |
Weekly change (RMB/mt) |
6.5 mm |
Q235 |
3,883 |
569 |
-30 |
|
20 mm |
HRB 335 |
3,787 |
555 |
-36 |
|
20 mm |
HRB 400 |
3,957 |
580 |
-26 |
By the end of trading on January 22, market prices of 6.5 mm Q235 high speed wire rod were at RMB 3,930/mt ($576/mt), RMB 3,740/mt ($548/mt) and RMB 3,980/mt ($584/mt) in Shanghai, Beijing and Guangzhou respectively; meanwhile 20 mm HRB 335 rebar prices stood at RMB 3,650/mt ($535/mt), RMB 3,730/mt ($547/mt) and RMB 3,980/mt ($584/mt) in the above respective areas, with 20 mm HRB 400 offered at RMB 3,790/mt ($556/mt), RMB 3,830/mt ($562/mt) and RMB 4,250/mt ($623/mt) respectively.
Over the past week longs prices have declined in most regions of China. The only exception is the Beijing market, where traders have been unwilling to lower their prices on account of high costs. Nevertheless, it is expected that the prices in Beijing will also go down in the near future following the downward movement seen in surrounding areas such as Tianjin.
On the mills' side, leading mills have generally kept their prices unchanged from the previous levels. During the past week, Shagang, Zhongtian and other eastern-based mills issued their latest price lists, making no change to their prices. Meanwhile, it is heard that Hebei Steel Group is likely to raise its prices for February, but this has not yet been confirmed.
As regards market inventory, rebar inventories in all the leading markets have seen obvious increases as a result of the limited trading volume and due to the normal levels of supplies still coming from the mills. Meanwhile, wire rod inventory in Shanghai has declined slightly.
On the macroeconomic side, at the State Council executive meeting on January 20 chaired by Premier Wen Jiabao, specific targets were discussed as regards the elimination of dated capacities in fields such as electricity, coal, coke, ferroalloys, calcium carbide, iron and steel, non-ferrous metals, construction materials and light industry and the textile industry. This represents negative news for the steel industry and has affected the steel futures market in China to a certain extent.
With regard to raw materials, billet prices moved down by RMB 50-120/mt ($7-18/mt) over the past week accompanied by slack commercial activity, the pig iron market followed a soft trend and saw a reduced trading volume, while the domestic scrap market maintained stable movement throughout the past week.
Overall, the Chinese long products market is expected to continue to slide down on a fluctuating trend ahead of China's New Year holiday (February 14-21), with no big change likely to be seen in market demand.