Chinese domestic longs prices started to trend down in the middle of the past week (May 4-10), influenced by the slumps observed in global futures markets and the fluctuations in the stock markets. Nevertheless, local mills are sticking to their list prices, while offers from some small mills seem to have lost support and have started to slide down.
Product name |
Specification |
Category |
Average price (RMB/mt) |
Price ($/mt) |
Weekly change ($/mt) |
6.5 mm |
Q235 |
4,400 |
645 |
-12 |
|
20 mm |
HRB 335 |
4,403 |
646 |
-19 |
|
20 mm |
HRB 400 |
4,540 |
666 |
-23 |
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 4,300/mt ($630/mt), RMB 4,300/mt ($630/mt) and RMB 4,600/mt ($674/mt), with HRB 335 grade 20 mm rebar prices respectively at RMB 4,150/mt ($609/mt), RMB 4,610/mt ($676/mt) and RMB 4,450/mt ($652/mt). Meanwhile, HRB 400 grade 20 mm rebar is priced at RMB 4,200/mt ($616/mt), RMB 4,720/mt ($692/mt) and RMB 4,700/mt ($689/mt) in the above respective markets. All prices are ex-mill and include 17 percent VAT.
Early last week, the Chinese longs market climbed up slightly as a result of the restocking process during the May Day holiday (May 1-3). However, in the context of bad news on the financial side, i.e., the sudden decrease in the futures markets and stock markets, activity in the domestic longs market became increasingly sluggish. As market demand is far from sufficient to digest all the stocks piled up during the holiday, current market inventory is quite high.
In the Shanghai market, due to the transportation restrictions for the ongoing Shanghai EXPO, shipments from and into the Shanghai market are facing difficulties. However, with the local mills still sticking to their high price levels, it will be difficult for market prices to register any big decrease.
In southern China, affected by the severe rainstorms in many districts in the region, construction programs have been suspended. It is forecast that the difficult weather conditions will continue in the week ahead, and the longs market in this region is expected to stagnate as a result.
Without any obvious stimulus for the Chinese longs market, a further decrease or small fluctuations are predicted for the coming period.