Divergence in Chinese steel market as daily output increasing again- 20 Dec 10

It is reported that steel prices presented a marginal rising trend, given daily output of domestic crude steel increased a little with high inventory and rare transaction recently.
Latest market report showed divergence on the market, some believed price rising may continue, others became pessimistic, thinking rising move can hardly continue. Data showed November daily output of crude steel was 1.622 million tonnes up 38,000 tonnes MoM or with an increase of 2.4%. Steel prices increased over the past week, given high cost and some resources in shortage.
Construction steel may vibrate in narrow ranges. The overall prices may be pushed up by steelmakers as they have started a new round of price rising. Although winter is the off season, energy saving campaign suppressed production capacity of some steel mills. Inventory consumption carried out smoothly since Sep, with lower total inventory.
Domestic hot rolled coil/plates presented a vibrated trend after moving up. Taking Shanghai market as an example, the bottom price at early time of last week was CNY 4300 per tonne meeting blocks in CNY 4380 per tonne to CNY 4400 per tonne. Steel prices would not move down due to high cost however, the rising trend couldn’t continue for long time as sluggish demand.
Some analysts said outside environment was another key factor to influence steel market. The tightened measurement from macro policy may obstruct rising move. Even no big policy change, the sluggish transaction will also limit the upturn.

Dec 20, 2010 09:17
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