Post Lunar holiday the steel market in China hung in a limbo with its characteristic ambivalence. Enthusiasm frittered in the absence of buying.

Even though market levels precariously strung in the first week after the holiday wisdom dawned on the operators that the demand is unlikely to pick up in February.

Borne out of desperation during H2 when the steel prices remained depressed the supply chain developed optimism on the eve of Lunar Holidays of a possible effervescence afterwards. Uncharacteristically the holiday period was rather active with stock replenishment by stockiest traders.

Despite production slowdown 1.669 million tonne of crude steel per day in the January 11st to 20th 2012 period down 1.3% compared with the previous 10 days at 1.691 million tonnes per day. Average daily rebar output of rebar was at 0.3987 million tonne, the monthly production is estimated to reach around 12 million tonnes. Taking the increasing inventory volume and sluggish demand into consideration, we would hardly be looking forward to optimistic market performance shortly.

Enthusiasm proved to be its nemesis as the stocks exerted heavily on the prices without transactions. European crisis unlikely to ease and the domestic demand from the construction sector remaining sluggish resistance to downslide yielded prevalent correction in week 2.

Rebar

Change is on 8th February as compared to 7th February 2012
In per tonne

1 USD = CNY 6.3

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(Sourced from www. steelprices-china.com)