Chinese traders’ stocks rise further, but pace slows
The finished steel inventories held by Chinese traders that have been steadily mounting since late December increased further by 1.5 million tonnes over February 3-9, according to Mysteel’s latest stocks survey. But the pace of accumulation slowed from the 3.1 million tonnes-level witnessed in the prior period, chiefly due to the uptick in demand, sources said.
Near-term outlook on China’s steel products
Below is the brief near-term outlook for five key steel products Mysteel shares on a weekly basis, drawing upon the results of related surveys and communication with Chinese market participants.
Rebar & wire rod: Prices of these longs may lose some ground over February 6-10, as many end-users have adopted a cautious stance on buying.
Besides, high rebar stocks piled at commercial warehouses also weighed on the prices. Rebar stocks at 429 warehouses in 132 Chinese cities under Mysteel’s tracking increased by 17.2% on week to 11.5 million tonnes as of February 2.
Hot-rolled coil: This price may be narrowly-rangebound in the week ending February 10, as the accumulation of HRC stocks at commercial warehouses has been higher than expected, which may dampen the prices.
Cold-rolled coil: The price may decline modestly this week, as most traders are willing to work off some CRC stocks even at lower prices.
Besides, the CRC output will grow with more mills’ resumption of operations. The total CRC output among 29 Chinese steelmakers Mysteel tracks increased by 10,500 tonnes on week to 782,600 tonnes as of February 1.
Medium plate: The price may slip over February 6-10, as the accumulation of plate stocks at commercial warehouses – mainly caused by mills’ excessive supply – have weighed on the prices. As of February 2, the total plate stocks at 217 warehouses in 65 Chinese cities under Mysteel’s tracking recorded 2.8 million tonnes, jumping by 17% on week.
Sections: Prices may lose some steam this week, as many traders have compromised on prices to offload some tonnage, while most end-users have procured only to meet immediate demand.
China’s steel prices may rise on sentiment in Feb
Chinese steel prices are likely to strengthen this month, as domestic steelmakers may persist in lifting prices to bolster their profit margins, Mysteel’s chief analyst Wang Jianhua predicted in his latest monthly outlook. At the same time, the lower-than-expected inventory levels have given a boost to steel market sentiment, he observed.
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