Chinese long products market preparing to rise

SteelOrbis Shanghai Chinese rebar prices went steadily up, and that of wire rod remained stable last week. Compared with the previous week, the market inventory continued to decline, with bigger trading volume. On August 25, the average price of 20 mm diameter HRB335 rebar in China's three major local markets; Shanghai, Beijing and Guangzhou, increased RMB 30/mt ($4) week on week to RMB 3,020/mt ($379), that of 20 mm diameter HRB400 rebar increased RMB 20/mt ($3) to RMB 3,127/mt ($393). The average price of 6.5 mm Q235 high speed wire rod increased RMB 6/mt ($1) to RMB 3,193/mt ($401). Last week, the high temperature in most regions of China started to decrease gradually. Particularly in northwestern regions the weather became cooler. So, the end-users' demand and commercial activities increased in turn. Meanwhile, the rise in billet prices harmed the production motivation of some rolling mills, leading to tight supply. Inventories in various regional markets saw different degrees of decline, even in short of products with certain specifications, which is good news for the traders. However, in eastern China, the arrival of many wire rod supplies curbed the price increase, but the market did not see any big decrease, indicating an optimistic market atmosphere. According to the observations on different markets, Chinese long products market is at a critical point for rise. The optimistic attitudes of traders, the lower level of inventory and the growing costs all resulted in a strong momentum for price rise on the supply side. Once the weather turns better and demand increases, Chinese long product prices will increase by a certain margin.