Chinese long steel market still pointing downward

With few new arrivals of long steel products in the Chinese market, market inventory has been declining in recent days. However, given the low levels of demand, no improvement has been seen in the market and prices have continued to drop down. As of July 12, average long steel prices in the main Chinese cities are as follows:

In China's three main steel markets, i.e., Shanghai, Beijing and Guangzhou, the prices of Q235 grade 6.5 mm size high speed wire rod now respectively stand at RMB 3,830/mt ($566/mt), RMB 3,850/mt ($569/mt) and RMB 3,970/mt ($586/mt), with HRB 335 grade 20 mm rebar prices respectively at RMB 3,620/mt ($535/mt), RMB 3,900/mt ($576/mt) and RMB 3,920/mt ($579/mt). Meanwhile, HRB 400 grade 20 mm rebar is priced at RMB 3,670/mt ($542/mt), RMB 4,000/mt ($591/mt) and RMB 4,220/mt ($623/mt) in the above respective markets. All prices are ex-mill and include 17 percent VAT.

In the past couple of weeks, the Chinese long steel market has trended downwards. Despite some increases among second and third tier producers in China's northern region, quotations given by large traders are still pointing downwards. On the end-user side, buying activities continue to lack momentum and most purchases are concluded at low prices. With few new arrivals in the market, traders are not under any great pressure from inventories at present.

In China's eastern and southern regions, the continuous rainy weather has hindered the recovery of the steel markets. In the southern Chinese market, there have been few new arrivals of long steel products due to the overhaul work carried out by leading local producer Shaoshan Steel. In the eastern Chinese market, traders have slowed down their booking activities.

As the rainy season will come to an end soon, suspended projects are likely to be restarted in the near future with a resulting rise in long steel purchases.