According to the latest report, there has been a sharp fall in the Chinese steel spot market in the recent week. At the same time, the downward power of steel market is much strengthened, as selling low becomes quite popular in the market. After the preceding adjusting stage, market risk is gradually transferred from traders to steel mills, and some traders are resisting orders now. A deep suffering for Chinese steel market seems to be unavoidable then.
Ever since the round of price falls in the end of April, traders have been main market risk takers, while steel mills anti risk capacity is strengthened due to the price rise in the beginning of this year. However, after the market consumption for months, risks are gradually transferred to steel mills . At present, cash flow is the biggest difficulty encountered by steel mills. Whether and how to compromise will be the focus of steel mill and trader relationship.
In the recent week, the prices rebar and wire rod have both been dropping in Chinese domestic market. The construction steel price maintains the weak trend for almost two months and the market shows no signs of recovery until now. Hot-rolled coil price is also going down. After the price has fallen below CNY 4000 per tonne in the spot market, the downward trend is obviously accelerated.
Moreover, cold roll price is speeding up the downlink too. After the market has come into the traditional off season, demand is also weakened, and the pessimism of some steel mills have directly pushed the price to the periodic bottom.
As the supply and demand contradiction is acute, and the market confidence is insufficient, steel mills will gradually become the main market risk taker instead of traders.
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