Jiangsu Steel Group Co., Limited

Stainless steel manufacturer OEM & ODM

Forecast on Chinese Steel Market after Chinese Holiday

Inquiries : 9 - 2013-9-13 17:17:51

Chinese common hot rolled product has risen to CNY 48005000 per tonne within one month. SteelHome sees market inventory will bring an average profit of CNY 300-500 per tonne.

Chinese Spring Festival holiday will practically end after Lantern Festival (February 18, 11). In this week, although Chinese steel price rises on the whole, transaction is plain. For post-festival market, SteelHome expects prices to rise amid fluctuations.  

1. For Chinese steel mills February price policies, Baosteel, Ansteel and Wisco should be given more attention. SteelHome believe the steel mills may raise EXW price by CNY 200-300 per tonne to help stabilize the market. If the rise amounts to CNY 500, market may be dampened.  

2. End buyers are closely watching price rises and they may hold back orders and sit on the sidelines after the holiday.  

3. SteelHome sees little chances for further iron ore price soar. Imported commodities and Chinese-made ore are near the highs that occurred in 2008. Although before Chinese Spring Festival steel mills stay aside the market, we still see a slim possibility for iron ore price to drop.  

Coke and coal is on the uptrend. On January 11, 2nd metallurgical coke in Shanxi province is priced at CNY 18001900 per tonne.  

Given quarterly contract practice, Q2 iron ore import price is expected to have a minimum rise of 10 percent. Chinese steel mills will face higher cost pressure.  

Chinas central bank raised interest rates for the third time since mid-October by another 25 basis points last Tuesday, to help mop up liquidity and tame surging inflation. January new loan is estimated to be at 1 trillion Yuan or even higher. Financing tightening will be a certainty later on.  

SteelHome sees a positive outlook on post-holiday Chinese steel market.