Securities Times reported that the Chinese domestic steel market is predicted to maintain in corrections before the Spring Festival, with little possibility of going considerably up while after the festival, it's hoped to turn upward after a stage of destocking.
For the moment, spot demand is found too weak to support the steel price in this season especially in the North where transactions are almost stagnate. In the meanwhile, quicker increase of stock than demand is lending pressure on the steel prices too, citing a rebar stock of 5.244 million tonnes after rises of 11 straight weeks, rising 35%.
But the trading houses are mostly optimistic and holding the resource for future increase, though there are concerns that if the liquidity goes tenser, they might fall in fund shortage and undercut the price.
The production cost, originally facilitating the price rises, has eased up and served as a support by offering a floor, as per the report. This support should confine the downward margin of the prices.
Steel futures market appears firm in recent days, despite a previous retreat along with the soft commodities market as a whole, which was dragged down by expectation of tighter liquidity.