China's domestic long products market fluctuated within a small range over the past week, with accompanied with the declined trading volume. Meanwhile, with few change seen in inventory levels, Chinese mills slightly hiked their ex-factory prices. Generally speaking, moving on a fluctuating trend, the domestic long products market is now accumulating strength for the future ascension.
Product name | Specification | Category | Average price(RMB/mt) | Price ($/mt) | Weekly change (RMB/mt) |
20 mm | HRB 335 | 3,440 | 504 | +20 | |
20 mm | HRB 400 | 3,630 | 532 | +20 | |
6.5 mm | Q235 | 3,400 | 499 | +30 |
During the first week after the May Day holiday, domestic market observed different performance in various regions. In northern regions, due to the too high price levels of the previous times, market showed a minor correction on a weak trend; while market in the east registered an obvious rise under the influence of the positive expectations and ascended raw material prices; finally, prices in the northwestern regions jumped up considerably by RMB 150-200/mt ($22-30/mt), the highest increase in the nationwide market.
Despite the mixed performance, trading volume in various regions all decreased from the previous levels, with almost no change seen in inventory levels. In general, China's long products inventory has finished its downward movement, unable to offer any momentum for further price climb. It should be mills' hikes of their ex-factory prices that will drive up the market prices in the future.
Last week, with no price adjustment announced by various leading mills, only a small number of medium and small mills have raised their prices slightly by margins less than RMB 30/mt ($4/mt). Although this move cannot push up the market prices, it still provides a powerful support to the market.
Against the background of the recovered semis prices and of the continuous rise in the Baltic Dry Index (BDI), prices of raw materials rebounded in the past week. Characterized by the remarkable supply shortage, semis market performed quite strong on a rising trend. Coking enterprises raised the coke prices continuously with the tight availability in the market. Meanwhile, against the improving finished steel market, iron ore suppliers became tough in the iron ore contract price negotiations. Rio Tinto rejected the 40-percent price reduction raised by mills, adding new strength to the iron ore spot market.
Above all, the positive movement in the Chinese market can be regarded as a kind of preparation for the future market ascension.