It is reported that steel price started to bottom out and the market appeared getting active when it entered into November, where traders seemed steady but still felt a bit worry about the future movement, holding that this round of uptrend won’t last for long time because the timing for the market rally has not yet come.

Although the soft behavior in construction steel market has not materially changed, some places have eyed all-round price gains and declining stockpile and increasing sales. In Shanghai, for example, offers for rebar and wire rod were lifted CNY 20 per tonne to CNY 30 per tonne recently by some traders and even CNY 50 per tonne to CNY 80 per tonne for some gauges. Besides, downstream buyers are getting more energetic.

HRC and medium plate markets are also getting stable recently. Prices for HRC generally gained CNY 30 per tonne to CNY 50 per tonne in Shanghai recently and some gauges posted a rise of CNY 80 per tonne.

The recent price rebound, some market players think that is the normal bottom out, for some steel products prices have approached the cost line causing quite a number of producers in face of slim profit or losses. It is time that the market turns to the rational level. Another reason behind the price rise is the decreased inventory in society and insufficient traders’ spot resources at hand. Besides, over 50 steel mills scaled up their EXW prices for rebar and wire rod since Nov, with CNY 30 per tonne to CNY 50 per tonne and CNY 70 per tonne to CNY 80 per tonne in general, triggering the spot market rise.

Some operators believe that the price hikes of some materials such as iron ore, coke and scrap steel are the drives behind the makers’ moves. But where the market will be headed in future? Traders hold different views, but most feel it is necessary to be cautious because they don’t think it is about time that the steel market starts to rally.

A business operator said demand has not yet increased apparently so far. Demand for construction steel won’t increase in winter, especially in north areas where adverse weather has halted all constructions.

Steel mills are still unwilling to cut production. And steel inventory is observed still hovering at a high level, a big obstacle before the price recovering.

(Sourced from MySteel.net)
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