According to the latest market report by Mysteel, over 70% of Chinese steel traders have left the market to enjoy their Spring Festival in the last transaction week before the holiday with an average price change of CNY 10 per tonne.
Currently, traders hold different attitudes on the post holiday market and the whole construction steel market is estimated to be hard to restart in this February.
Mysteel analyzed the construction steel spot price to be firm in the last transaction week before Spring Festival while the price change for medium plate in Beijing went as high as CNY 40 per tonne, HRC price edge a little at that time, but CRC ones decreased by CNY 2 per tonne. Mid and large sized sections had witnessed a price adjustment of CNY 10 per tonne.
For the moment, there are 14 million tonnes steel inventories in major Chinese cities, some of which are stored by downstream users during the holiday. But most of the inventories are caused by traders' optimistic sentiment on the market after Chinese Lunar New Year. Hence, the pressure from both cash and cost on construction steel market will strengthen.
On the HRC market, some Chinese steel traders believe steel price is likely to increase, citing the inflation anticipation, rising fine price and steelmakers ex works price hike. Yet, some others think the price will drop in the future as for the present high capacity inventory and limited steel export.
As for the CRC market, there are also two opposite attitudes. Some hold that the rising CRC inventory will weigh heavily on future market; but the other believe the strong downstream industry will sustain post-holiday CRC market. Nevertheless, steel traders are generally kept cautious on the post holiday market right now.