According to the price trend in the last week, the problem of imbalance between supply and demand still exists, which directly leads to the decline of the Shanghai construction steel price and rebound weakly. The situation is uncertain at present.
The construction steel inventories have been rising for 11 consecutive weeks as the supply pressure is still great. Up to last week, the total inventories of HRB335 rebars in 10mm to 32mm are 437,000 tonnes up by 4.8%. HRB400 rebars in 10mm to 32mm are 211,000 tonnes down by 2.27%. On the whole, rebars inventories in Shanghai increased by 15,000 up by 2.38%.
The demand construction steel is increasing in Shanghai market these days and it is good to relieve the inventories pressure theoretically. But the reality is nor the case.
Facing the serious prospect of production releasing, parts of traders may sell products quickly and some may hold wait and watch mood to speculate the price. Therefore, both of these will restrict the steel price rebound. Market players need pay attention to the fluctuation of steel price in next period.
At the same time, trades should give close attention to the real demand releasing after the National Holidays. As we know, CNY 4000 billion is invested in the end of 2008, which helps to consume the productions. As a result, people wait the real demand to help Chinese steel market pull through.
At present, the high inventories and speculation of steel price have a band influence to the future trend of steel price. Construction steel price is low than CNY 3400 per tonne, and HRC price is around CNY 3300 per tonne in Shanghai market. And it is just the beginning.
Overall, the market trend is uncertain although the holidays bring hope.