Chinese steel market remained closed for the Mid Autumn Festival from September 22 to September 24th 2010.
China’s steel price in the domestic market has obviously slid backward in the recent week, which is due to the lack of supporting from practical transaction. Market experts have also expressed the same opinion that “The last surge was brought about optimistic expectation rather than real supply and demand condition in the market. So eventually there will be a rational return.”
Last week, adjustment and mild ups and downs dominates the whole China domestic market. From the very start, market was strongly stimulated by the surging price shown in the pricing policy of Hebei steel and Shagang steel. However, as the upward trend went too fast, the end consumers became more cautious and market demand was also restricted by that cautious attitude.
After the heated topic about energy conservation and emission reduction policy slowly calmed down, the trouble hidden behind the fast surge has begun to appear. Take hot rolled coil market as an example, recently the inventory of hot rolled coil in Shanghai is about 2.5 million tonnes to 2.6 million tonnes and more hot rolled coil products are still being transported to Shanghai.
Although September is the traditional booming season of steel consuming, the storage has not declined yet as predicted by many people. Just to the opposite, the downward trend will dominates China’s steel market from now on.