Chinese long products market remains basically stable

While some players in China's domestic longs market have since February 20 started to return to work, the slackness in the market is expected to continue until March. Current quotations are at the same levels as in the pre-Spring Festival period. Official policy measures introduced during the holiday period have affected the trend of the futures market, and so there is a strong wait-and-see atmosphere in the longs market at present.

At present, the prices of 6.5 mm wire rod in Shanghai, Beijing, and Guangzhou are RMB 3,900/mt ($572/mt), RMB 3,730/mt ($547/mt), RMB 3,880/mt ($569/mt) respectively; the prices of 20mm HRB 335 rebar in these three cities are at RMB 3,660/mt ($537), RMB 3,750/mt ($550/mt) and RMB 3,860/mt ($566/mt); the prices of 20 mm HRB 400 rebar are at RMB 3,770/mt ($553/mt), RMB 3,850/mt ($565/mt) and RMB 4,140/mt ($607/mt) respectively in the cities in question.

Shagang has issued unchanged rebar prices for late February. At present, this producer's ex-factory price of 14-25 mm HRB 335 rebar stands at RMB 3,860/mt ($566/mt), its prices of carbon steel wire rods and rebar in coils are the same as before; its ex-factory price of high speed carbon wire rod is RMB 4,050/mt ($594/mt), while its ex-factory price of rebar in coils stands at RMB 4,280/mt ($628/mt).

The rebar inventory has increased significantly after the festival, with inventories in Guangzhou and Lecong in Guangdong Province up dramatically. In Shanghai, rebar inventory is at 687,230 mt and wire rod inventory stands at 119,360 mt, up 91,360 mt and 119,360 mt respectively compared with February 11.

As regards official policy measures in China, the People's Bank of China has decided to raise the RMB deposit reserve ratio by 0.5 percentage points for financial institutions effective from February 25, which is expected to impact the real estate sector in the coming period.