According to analyst Mr Ren Qingping GM of Shanghai Wubo Steel Structure & Materials Co Ltd the steel prices in China continued to fluctuate since the beginning of this year. He cautioned that traders should be more cautious in the market participation after the Spring Festival.
According to his survey, H beam market was on the wane with correction since the start of 2010 till now, with thin market demand of transactions, especially after the central bank decided to raise deposit-reserve ratio by 0.5%. Also, the futures market and screen trading immediately started declining in Shanghai area, when the news came through.
He said that "On the second day, the HRC at a specified future date showed a price decline of CNY 168 per tonne as much as highest in Shanghai."
Mr Ren noted that some traders expected to see a tide of rebounding trend in steel market after Spring Festival holidays, but he didn't think so. He said “Most of them were busy preparing storage by increasing order volume, gambling for a price rebound. Even more, the social inventory was on the increase, hitting new record high in the history. As estimated, the supply volume of large and medium section in February market went at 0.726 million tonnes and 3.44 million tonnes up by 51.99% and 6.8%YoY respectively.”
It is the traditional dull season fro steel market, with sliding demand and increasing inventory and Mr Ren suggested that the traders should knock the costs down, trying to expand the market shares and reduce losses. Besides, the traders would better satisfy market and customers' demand, with a bid to ease market risks