National Business Daily reported that the traditional winter storage season is coming on the way after several month price hikes, and the market insiders suggested that the steel traders should be more cautious towards the winter storage.

Recently, Pangang Group Chengdu Steel & Vanadium Company decided to lift the rebar and wire rod EXW prices up by CNY 50 per tonne and CNY 30 per tonne respectively based on the price policy adjustment on October 19th. While, Hebei Steel Group also planned to enhance the price of construction steel in H1 of November by CNY 80 per tonne on a basis of price policy on October 22nd.

Influenced by the continuous implementation of energy conservation policy, the daily production of crude steel in Mid October is 1.56 million tonnes down 3.9% compared to that of early October however, the steel market is still full of upward motivations. To steel futures market, the rebar futures early opened at CNY 4,565 per tonne, with the highest point hitting at CNY 4,588 per tonne and finally closed at CNY 4,551 per tonne up by CNY 6 per tonne from one day ago.

According to Baosteel, the steel price is hard to go up in Q4, and the domestic supply & demand tie would hold steady. However, according to observation of market experts, the current storage of steel is far from being digested smoothly, calculated on the current ex-w price in China, the cost of winter storage this year may hit the record high, which will leading the steel market to face more uncertainties. The analysts firmly suggested that the traders should hold cautious towards the winter storage in the future.

(Sourced from National Business Daily)