After the debilitating turn of events in H1 wherein except for production and cost nothing else seemed to be accelerating in the Chinese steel sector, the market is all set for breath taking performance in H2.
H2 typically is a period of correction in production. However 2011 has been disarraying in many ways starting with a lackluster demand in spring passing through a devastating Japanese Tsunami and political inferno in MENA nations culminating in confidence shattering debt crisis in Greece and USA. Undeniably the global polity and economy has demonstrated exemplary resilience in squabbling their way out but grind has been energy sapping.
Chinese monolith had its share of problems with plummeting demand from the key sectors of construction and manufacturing coupled with an irrepressible inflation which despite 13 shots of hike in lending rate remained recalcitrant. Aggravating the agony was an impudent raw material cost and apprehension of acute power shortage.
Come July the market weary of slothful past odds seemed to be turning for a revival with fortitude as the fundamentals seem realigning for a revival.
The feared power rationing is on abeyance as the good monsoon has rejuvenated hydro electric generation obviating the need for severe cuts. At the same time demand from the much touted 10 million budget house construction along with on-going urbanization in tier 2 and 3 cities has provided the fillip to demand.
The under performing manufacturing sector reflected in the tumbling Purchase Managers Index (PMI) at 48.1 showing negative growth has given little reason for the flat product market to cheer up. However this segment is also sucked in the effervescence.
The omnipresent cost escalation with iron ore prices on a roller coaster after the supply truncation in India will provide the necessary nudge.
Rebar
| Location | CNY |
| Shanghai | 70 |
| Hangzhou | 70 |
| Nanjing | 50 |
| Jinan | 40 |
| Hefei | 10 |
| Fuzhou | 70 |
| Nanchang | 70 |
| Guangzhou | 110 |
| Changsha | 80 |
| Wuhan | 50 |
| Zhengzhou | 20 |
| Beijing | 50 |
| Tianjin | 70 |
| Shijiazhuang | 50 |
| Taiyuan | 60 |
| Shenyang | 50 |
| Harbin | 50 |
| Chongqing | 50 |
| Chengdu | 30 |
| Guiyang | 50 |
| Kunming | 20 |
| Xian | 60 |
| Lanzhou | 80 |
| Urumchi | 100 |
Change is on August 3rd compared to July 29th 2011
In CNY per tonne
HRC
| Location | CNY |
| Shanghai | 30 |
| Hangzhou | 10 |
| Nanjing | 10 |
| Jinan | 0 |
| Hefei | 30 |
| Fuzhou | 0 |
| Nanchang | 30 |
| Guangzhou | 30 |
| Changsha | 0 |
| Wuhan | 30 |
| Zhengzhou | 0 |
| Beijing | 10 |
| Tianjin | 30 |
| Shijiazhuang | 30 |
| Taiyuan | 0 |
| Shenyang | 10 |
| Harbin | 20 |
| Chongqing | 50 |
| Chengdu | 40 |
| Kunming | 60 |
| Xian | 20 |
| Lanzhou | 30 |
| Urumchi | 30 |
Change is on August 3rd compared to July 29th 2011
In CNY per tonne
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