Despite the sharp correction already seen in long product prices in China, over the past week the domestic longs market maintained its downward movement under the influence of rising inventory levels. Chinese rebar inventory has now posted a rise for the eighth straight week.
Product name | Specification | Category | Average price (RMB/mt) | Price ($/mt) | Weekly change (RMB/mt) |
Rebar | 20 mm | HRB 335 | 3,610 | 529 | -190 |
Rebar | 20 mm | HRB 400 | 3,780 | 553 | -210 |
Wire rod | 6.5 mm | Q235 | 3,500 | 512 | -160 |
In the past week, China's domestic long products market continued its downward movement on the whole, accompanied by continuing sluggishness of commercial activity.
At the beginning of the past week market confidence was significantly affected by the sharp slump in the steel futures market. In this context, some traders started to panic and became eager to sell off their stocks at low prices levels, thus driving down the overall market.
According to a survey of large warehouses across China (excluding the autonomous regions of Xinjiang and Tibet), rebar inventory totaled 4.19729 million mt, up 192,100 mt week on week; meanwhile, wire rod inventory amounted to 1.32403 million mt, up 50,310 mt. Market inventory seems to have speeded up its ascension during the past week.
On the raw material side, the domestic pig iron market moved down continuously in the past week, with no improvement recorded in market trading; meanwhile, the local scrap market registered a sliding movement, with frequent reductions made by various mills to their purchase prices for scrap, especially in Jiangsu Province. The Chinese billet market also moved on a downward trend throughout the past week.
Overall, the continuation of the falling movement in the domestic longs market significantly hit market confidence over the past week. Some traders and downstream buyers that had intended to do some "bottom fishing" have now decided to stand aside from market trading for the time being, resulting in climbing market inventory levels. Meanwhile, it is heard that some mills have started to plan overhauling works, and also that a certain improvement has been registered in the export market in recent days. Generally speaking, the Chinese longs market is expected to move down further with fluctuations in the coming week.