Chinese long products market stable on weak trend

SteelOrbis Shanghai Influenced by the declining trading volume and inventory, Chinese rebar prices showed stable movement over the past week. A slight increase in wire rod inventory and a small decrease in its prices were also observed. While the overall tendency was weak, the market saw differing performances in the southern and northern regions. On December 1, the average price of 20 mm diameter HRB335 rebar in the three major Chinese markets - Shanghai, Beijing and Guangzhou - was down RMB 7/mt ($1) week on week to RMB 3,100/mt ($396), while that of 20mm diameter HRB 400 rebar was down RMB 23/mt ($3) to RMB 3,300/mt ($421). Meanwhile, the average price of 6.5mm Q235 high speed wire rod was down RMB 13/mt ($2) to RMB 3,180/mt ($406). The severe winter conditions in northern China had a great impact on demand. Although the price of 16-25 mm HRB 335 rebar remained above RMB 3,000/mt ($383) in Beijing, the Tianjin market has already broken through this important barrier. In consideration of the domestic market and exports, the five leading mills in northern China lowered their ex-factory prices to the market price level. In eastern China, the market saw better commercial activity than in the previous period. With the reduced supplies from leading mills such as Shagang, market inventory continued to go down. Meanwhile, most of the local steel mills did not change their ex-factory prices for early December. Influenced by this, the eastern China market prices showed slight up and down fluctuations. Rebar prices remained stable in southern China, with a slight decrease being seen in wire rod prices. Market inventory increased over the past week, but this did not affect the market to any great extent. Generally speaking, steel mills are putting more effort into exports, and thus market inventory is still at a relatively low level. In the short term, there is not much pressure on the market. However, the steel inventory at several major northern ports has risen recently to a high level - most of it being destined for export. Once exports fall, we can expect to see the markets in southern and eastern China affected first, than leading to a downturn across the whole market.