Chinese longs market remains stable

SteelOrbis Shanghai Chinese long steel prices are continuing to increase but with smaller ranges. However, the trade volume has not changed much last week, and the market inventory has remained at the level of the previous week. During last week, the frequent price hikes by steel mills further supported the market prices. Shanghai market saw a slight downward trend after steel mills' price increase, but thanks to the positive anticipation of the future of the market by the traders, the price quotations obviously went up. However, as the demand from the end users is not strong, some traders kept active in underselling products, leading to a slight decrease in actual deal prices in latter half of last week. Driven by the market expectations and price hikes of leading steel mills, the Guangzhou market witnessed a sharp price increase. Nevertheless, the deal prices indicated minor reduction as a result of the bearish demand, Tomb-Sweeping Day and the rainy weather. Prices in North China kept climbing. Supported by the good export condition, major steel mills in North China put lesser products into the market, leading to shortage in certain product varieties. The recent increase in domestic coal, electricity, petroleum and freight raised the production and logistics cost of steel products. Despite the increase in production costs, the market prices are trying to resist to decline. At present, market prices in northeastern and northern China are higher compared with those in southern markets. In addition, steel mills in northeastern markets do not have much planned production, while those in northern China are busy in exporting their products and producing specialty steel. The average price of 20 mm HRB335 rebars in China's three major local markets started the week with RMB 36/mt ($4) weekly increase at RMB 3,063/mt ($382), that of 20 mm HRB 400 rebar with RMB 53/mt ($7) increase at RMB 3,160/mt ($397). The average price of 6.5 mm Q235 high speed wire rod increased RMB 46/mt ($6) to RMB 3,173/mt ($396). Long product prices are expected to remain stable with slight fluctuations this week.