Over the past week the considerable price hikes made by various mills have once again given impetus to the upward movement of the Chinese long products market, while market prices have also been boosted by the continuous rise in the futures market.
Product name | Specification | Category | Average price (RMB/mt) | Price ($/mt) | Weekly change (RMB/mt) |
20 mm | HRB 335 | 4,380 | 641 | +320 | |
20 mm | HRB 400 | 4,490 | 657 | +340 | |
6.5 mm | Q235 | 4,300 | 630 | +290 |
The domestic construction steel market in China has remained on the rise throughout the past week. The northern China market registered a sharp climb due to general expectations that mills will continue to raise their ex-factory prices in August. Moreover, the local authorities in Beijing, Tianjin and Tangshan recently carried out strict checks on truck overloading, contributing to a remarkable increase in transportation costs - another factor helping to push up local market prices. Nevertheless, it is observed that end-side users again only made very limited purchases over the past week, with most deals concluded between traders.
As regards the eastern regions, the market has recorded an overall rise in the past week, though accompanied by a flat sales performance. However, since many traders bought in or sold off materials during the past week, commercial activities appeared relatively active.
Due to the accumulation of upward momentum, the southern market, which had this year been posting the weakest performance compared to the other regions, soared very strongly in the past week, registering its biggest weekly increase so far this year. However, affected by the rainy weather and the busy harvest season, trading activity was very slack.
On the raw material side, stimulated by the soaring movement of finished steel prices, a rising tendency has also been recorded in raw material prices. Characterized by tight availability of spot supplies, the domestic pig iron market saw an increase of RMB 250/mt or so in most regions.
In the past week, the rebar price in the Chinese futures market surged significantly by RMB 443/mt or 10.6 percent, with the monthly increase up to RMB 804/mt or 21 percent for July - both constituting the biggest weekly and monthly increases since the launch of rebar futures.
Overall, the mills' increased prices still remain the main factor providing support for domestic longs prices, against the background of the booming futures market. However, due to the rapidity of the price increase movement, many traders have started to express some degree of caution. As regards the future, it is expected that China's long products market will continue its rising trend in the coming week, but with a slower rate of increase.