Over the past week long product prices in China first dropped down before recording a minor upward correction towards the end of the week. At present, it is becoming more difficult for China's domestic longs market to decline further since the current market prices have almost reached ex-factory levels. However, due to the unrelieved pressure from rising inventory levels, China's longs market is still expected to move in a general downward direction.
Product name | Specification | Category | Average price(RMB/mt) | Price ($/mt) | Weekly change (RMB/mt) |
20 mm | HRB 335 | 3,600 | 528 | -10 | |
20 mm | HRB 400 | 3,760 | 551 | -20 | |
6.5 mm | Q235 | 3,510 | 515 | +10 |
At the beginning of the past week, the Chinese longs market remained on its sliding trend on the whole. Nevertheless, given the recovery seen in the steel futures market and in the Shanghai market, a certain release was observed in market demand. Subsequently, the domestic market registered an overall rebound during the second half of the past week, with a certain rise seen in the ex-factory prices of some southern and southwestern-based mills.
Market prices in eastern China first slipped slightly at the beginning of the past week. However, influenced by the recovery in the futures market, some traders in the Shanghai market made tentative upward adjustments to their sales prices and registered relatively brisk levels of commercial activity. In this context, the overall longs market in China saw a rebound in the remaining days of the week, though some high-price materials indicated some softness at the end of the week.
In the south, market prices continued to decline in recent days, with most end-side buyers standing aside from market trading. However, under the influence of the rebound in the market, buyers became more willing to conclude purchases, resulting in an obvious rise in the trading volume. On the mills' side, the southern-based Shaoguan Steel and Guangzhou Steel raised their ex-factory prices moderately, by RMB 20-50/mt, in the past week, while some southwestern-based mills increased their prices considerably. These hikes have helped boost market confidence to a certain extent. In addition, it is heard that some mills in the south are planning to carry out overhauling work on blast furnaces and production lines - news which helps to stabilize the local market.
In the past week, longs prices in Beijing and Tianjin first moved down gently before climbing up during the end of the week with a remarkable increase seen in the trading volume.
On the raw material side, the domestic pig iron market retained its downward movement throughout the past week; meanwhile, the local scrap market was characterized by an overall sluggishness, with a general reduction made by various mills to their purchase prices for scrap. The Chinese billet market fluctuated within a small range in the past week.
On the whole, supported by the expansion of the trading volume, the Chinese longs market registered a minor rebound over the past week. Nevertheless, in view of the relatively high market inventory, the room for further ascension of prices seems quite limited in the near future. As a result, the overall longs market in China is expected to fluctuate moderately in the coming week.