SteelOrbis Shanghai
Chinese long products market was calm through last week, while the prices slightly fluctuated in all regional markets. While the commerce was sluggish, the quantity of new supply was little, too. Therefore, the market inventory did not change much. However, some steel mills hiked the ex-factory prices, bringing a ray of hope to the market.
On August 18, the average price of 20 mm diameter HRB 335
rebar in Chinese three major markets, Shanghai, Beijing and Guangzhou was RMB 2,990/mt ($375), that of 20mm diameter HRB 400
rebar is at RMB 3,107/mt ($390), both equal to the level of the previous week. The average price of 6.5 mm Q235 high speed
wire rod is down RMB 16/mt ($2) to RMB 3,187/mt ($399).
Throughout last week,
rebar prices in southern, northeastern, southwestern, and northwestern regions continued to increase by a small margin. Influenced by the increasing supply and high amount of subsidy offered by steel mills,
wire rod prices saw a continuous decline. The sweltering and drought in southwestern regions led to the bearish market demand. Meanwhile, due to the tight electricity supply, steel mills in that area can not produce much; therefore, market moved stable with reducing supply.
According to the inventory statistics from all regional markets,
rebar inventory remained constant, while
wire rod inventory increased slightly.
Influenced by the rising demand for steel strip,
billet prices continued climbing throughout last week, resulting in higher costs for rolling mills. Some steel mills hiked their
rebar ex-factory prices by about RMB 50/mt ($6). If they do not reduce their ex-factory prices in the short term, then it will indicate that there will be an upward trend in September.
The latest fixed assets investment figures released by the National Bureau of Statistics last week indicated that, the investment in urban fixed assets totaled RMB 4.4771 trillion ($562 billion) from January to July, up 30.5 percent year on year. The growth rate is 0.8 percentage point lower that that of January-June period.
Investments in housing industry reached RMB 941.1 billion ($118.23 billion), up 20.4 percent year on year, while the growth rate is 3.8 percentage points lower. The data indicate that macro-control measures began to be influential from mid-June.
At the same time, on August 18, Friday, the Central Bank announced to raise the RMB deposit and loan interest rate by 0.27 percentage point, which indicates the government's attitude to strengthen the macro-control once more.
At present, it is not possible for macro-control to cause a continuous decrease in prices. Market is likely to see an increase for the later six months, but it may not be able to reach the highest price levels in the first half of the year.