During the week ending August 23, the Chinese long steel market has been characterized by different price trends depending on the various regions. In the northern Chinese market, long steel prices have seen a minor decrease, while in the eastern Chinese market prices have trended up slightly; on the other hand, in the southern market, long steel prices have more or less remained unchanged in the week in question. On the inventory side, rebar inventories in China have generally continued to decline, while wire rod inventories have risen slightly. As of August 23, the average prices of long steel products in the main Chinese cities are as follows:
Product name | Specification | Category | Average price (RMB/mt) | Price ($/mt) | Weekly change ($/mt) |
6.5 mm | Q235 | 4,237 | 622 | - | |
20 mm | HRB 335 | 4,120 | 607 | +2 | |
20 mm | HRB 400 | 4,303 | 634 | - |
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 4,220/mt ($622/mt), RMB 4,180/mt ($616/mt) and RMB 4,280/mt ($630/mt), with HRB 335 grade 20 mm rebar prices respectively at RMB 3,960/mt ($583/mt), RMB 4,160/mt ($613/mt) and RMB 4,240/mt ($624/mt). Meanwhile, HRB 400 grade 20 mm rebar is priced at RMB 4,050/mt ($596/mt), RMB 4,360/mt ($642/mt) and RMB 4,500/mt ($663/mt) in the above respective markets. All prices are ex-mill and include 17 percent VAT.
In the northern market, long steel prices have shown some weaknesses due to the lack of confidence in the local market following the softening of the domestic steel futures market last week. In the eastern market, steel producers successively announced new price policies during the week in question, generally keeping their prices stable.
It is reported that major Chinese steelmaker Shagang Steel Group will idle a 2,500 cubic meter blast furnace for six months due to an accident at the furnace, and this is expected to result in a production shortfall of 1 million mt of crude steel. In addition, some steel mills which have not completed their respective targets under the scope of China's energy saving and emissions reduction scheme are due to shut down some production facilities. Moreover, the electricity rationing measures implemented in some regions will cause some small mills to stop production. These factors are expected to cause a shortage of long steel supplies in the Chinese market. As for the coming period, it is expected that the domestic long steel market will trend sideways.