Jaway Stainless Steel

Chinese steel market might undergo renaissance in August

Steel market in China has been undergoing pangs of correction recurrently in H1 having a crippling effect on the overall sentiments. Irrespective of the seasonality and cyclical factors the prices have declined.

However some encouraging movements in the last few days have kindled hopes of a bout of revelry. The first signs came with firm futures trading for October. Although this can be glossed over as a furlong aspiration which might fizzle out on the touchstone of reality in the omnipresent turbulence, but certainly it gives solace to the operators.

Steel prices are expected to turnaround amidst looming monsoon albeit for reasons compelling purely on the market dynamics for a change. The downstream demand from the construction segment is urging to pick up as the pompous 10 million housing projects is yet to warm up. On the other hand the input material cost of iron ore which corrected over the last fortnight has shown signs of turnaround over the last one week as mills have opened buying after nearly a month recess.

June production clamp down owning to power rationing about to ebb mills having advanced maintenance schedules are rearing to go. Regardless of all the mitigating factors steel production has maintained a healthy average of nearly 1.95 million tonne per day implying the inherent confidence in the market of an elusive demand coming to passé sooner rather than later. Moreover the fluctuation in rebar prices within a narrow band of CNY 500 per tonne is indicative of modicum of stability.