Over the past week the Chinese long products market increased by a small margin in a context of growing market pressure from rising inventory levels. Considering the hikes made by mills to their January prices, traders are generally bullish as regards the future trend of the market.
Product name |
Specification |
Category |
Average price (RMB/mt) |
Price ($/mt) |
Weekly change (RMB/mt) |
Wire Rod |
6.5mm |
Q235 |
3,717 |
545 |
+60 |
20mm |
HRB335 |
3,730 |
547 |
+40 |
|
20mm |
HRB400 |
3,890 |
570 |
+50 |
While normal trading volume levels were recorded in the eastern market during the past week, commercial activity in the south and north appeared quite positive. In the context of a generally optimistic market atmosphere, traders and end-side buyers are quite active in making purchases, resulting in the increased trading volume over the past week. However, the trading volume again indicated a certain shrinkage at the end of the week due to insufficient demand.
According to the latest statistics, rebar inventory in China's leading markets continued to rise over the past week. By the close of business on December 17, rebar inventory in Shanghai reached 473,000 mt, up 13,000 mt week on week; meanwhile, wire rod inventory in Shanghai stood at 104,000 mt, up by 6,000 mt week on week.
In the past week, leading mills continued to raise their ex-factory prices of wire rod and rebar by margins of RMB 20-30/mt ($3-4/mt). Following the adjustments, the ex-factory price of 6.5 mm wire rod is in the range of RMB 3,930-4,190/mt ($576-614/mt), while 20 mm rebar is now offered at RMB 3,950-4,200/mt ($579-616/mt).
On the raw materials side, against the background of tight availability of materials, the domestic pig iron market continued to move on a stable trend during the past week, with a certain recovery seen in some regions; meanwhile, the scrap market registered a minor rise, and billet prices climbed up slightly by RMB 30-70/mt ($4-10/mt).
Overall, longs prices in China are expected to be boosted by high costs following the hikes made by mills to their prices. Moreover, encouraged by the central government's macroeconomic policies, market players are now more confident, which has a positive knock-on effect on long product prices in the domestic market. Nevertheless, rising inventory levels and the current slack season for demand both curb further upward movement of the market. As a result, China's domestic longs market is likely to follow a fluctuating movement in the coming week.