Chinese long products may not decrease anymore

SteelOrbis Shanghai Chinese long product prices became gradually stable last week. While the prices at leading markets went steadily up, the other markets saw both decreases and increases. Therefore, the overall market remained stable, changing from the downward trend earlier. Since rebar and debar prices in most regions have declined to the cost level of manufacturing mills, many steel mills stopped their production or arranged their overhauling works. Meanwhile, the current market price has gradually approached to the bottom price expectation of most traders; therefore, Chinese construction steel market was in gradual decline throughout last week. Among them, the prices in eastern China and northwestern regions stopped dropping and went up in the latter half of the week. The prices in most of the other regions also became stable during the same period, but the relatively high prices attracted much inflow of low-price supply; therefore, northeastern market saw a price decline. All in all, the continuous downward trend for Chinese long products has changed. The cost and psychological expectation do not support further price decline, and the steel mills also adjusted the production plan so as to control the production. However, the coexistence of high temperature and heavy rains in China currently curbed the demand, and the new real estate policy also resulted in the postponing of some projects. Therefore, Chinese long products market may see slight fluctuation in short term. Nevertheless, the return of foreign demand in the near future may provide a strong support for China's long products.