Chinese long steel market posts strong rise followed by small correction

During the week ending July 26, the Chinese long steel market in general moved up strongly, though a slight decrease was seen at the weekend. In the view of many market insiders, the decline is just a temporary correction to the significant uptrend and the market is expected to trend sideways on the whole in the short term. As of July 26, the average long steel prices in the main Chinese cities are as follows:

In China's three main steel markets, i.e., Shanghai, Beijing and Guangzhou, the prices of Q235 grade 6.5 mm size high speed wire rod now respectively stand at RMB 4,000/mt ($591/mt), RMB 4,100/mt ($606/mt) and RMB 4,170/mt ($616/mt), with HRB 335 grade 20 mm rebar prices respectively at RMB 3,750/mt ($554/mt), RMB 4,080/mt ($603/mt) and RMB 4,150/mt ($613/mt). Meanwhile, HRB 400 grade 20 mm rebar is priced at RMB 3,790/mt ($560/mt), RMB 3,970/mt ($586/mt) and RMB 4,400/mt ($650/mt) in the above respective markets. All prices are ex-mill and include 17 percent VAT.

Chinese long steel market has been characterized by a strong uptrend for most of the past week, with the average increase margin reaching RMB 100/mt ($14/mt), while prices in certain regions have even moved up by a maximum of RMB 200/mt ($20/mt). Both producers and traders are now eager to push up prices. However, without a vivid response from the end-user market, a temporary decline was observed at the weekend.

With prices lately on the rise, market inventories have been digested by domestic end-users and traders. Due to the improvement in the weather, long steel demand in China's domestic market has gained strength recently.

On July 23, Chinese steel producer Hebei Steel Corporation announced its new price policy for long steel products for the month of August, raising its listed prices of wire rod and rebar by RMB 100/mt ($15/mt) and RMB 150/mt ($22/mt) respectively.