Influenced by the mills' increased ex-factory prices, long product prices in the Chinese domestic market have continued to go up in the past week. Meanwhile, the continuous rise of the local steel futures market has also helped boost levels of confidence in the market.
Product name |
Specification |
Category |
Average price (RMB/mt) |
Price ($/mt) |
Weekly change (RMB/mt) |
Wire Rod |
6.5 mm |
Q235 |
3,870 |
567 |
+93 |
20 mm |
HRB 335 |
3,817 |
560 |
+44 |
|
20 mm |
HRB 400 |
3,973 |
583 |
+40 |
Stimulated by the sharp hike made by Hebei Steel Group to its ex-factory prices, and also by the uptrend in steel futures prices in Shanghai, the longs market in eastern China registered an obvious increase over the past week against a background of weak trading levels. As regards the southern regions, the market observed strong commercial activity at the beginning of the past week before registering a weakened trading performance towards the end of the week. In northern China, after undergoing a considerable rise in the first half of the week, long product prices began to show softness during the remaining days of the week, with small traders and end-side buyers in the market adopting a cautious approach.
According to the latest statistics, by the close of business on December 30, rebar inventory in Shanghai reached 543,000 mt, up 51,000 mt week on week; meanwhile, wire rod inventory in Shanghai stood at 109,000 mt, up 7,000 mt week on week. Moreover, total inventory of rebar and wire rod in Guangzhou climbed up by 20,000 mt or so compared with the previous week. Rebar inventory in Beijing amounted to 343,000 mt, up 14,000 mt week on week, while wire rod inventory in Beijing was down 1,000 mt week on week to 43,000 mt.
On the raw materials side, the domestic pig iron market has retained its upward tendency in the past week, accompanied by brisk levels of trading; meanwhile, the scrap market posted certain fluctuations, with Jiangsu Province-based mills first hiking and then lowering their purchase prices for scrap. The domestic billet market moved steadily up over the past week, by around RMB 60-220/mt ($9-32/mt), but with few deals concluded following the increase in prices.
Overall, considering the high costs of new materials, most traders have become unwilling to sell their materials at low price levels, thus offering support for current market prices. Nevertheless, following the continuous climb in market prices, long product prices in China have already reached relatively high levels, with end-side buyers reducing their purchases accordingly, which may prevent the market from rising further.