July 19 is the first “sunny” day after Shanghai has come out of plum rains. According to latest market report, fall in steel price is slowing, construction steel market of Shanghai may step out of slackness this week.
Although downstream demand is still weak, market demand may get stronger after Southeast China has come out of the plum rain season. On one hand, traders are selling steel at low price; on the other hand, they wish that steel price may rise. Steel market is full of sensitive wait-and-see attitudes now.
Analysts express negative opinions: orders of Chinese steel mills are decreasing and downstream demand is confined by poor prospects.
From the perspective of downstream demand, terminal purchasing amounts in Shanghai is lower than the yearly average, and plum rain season’s restriction on the construction is a main factor. As Shanghai is gradually out of plum rains, construction steel demand may likely be released and turn better.
As showed by monitoring statistics, steel inventory is gradually being digested. Rainy weather in recent days has caused the rust corrosion of steel products and the inventory structure is improperly formed, both of which justify the need to readjust inventory amount and structure.
Analysts tell the reporter that demand after plum rain season may increase, but the complicated inventory structure of steel products will make it not that easy. Inventory amount of construction steel is large, but the large amount is scattered into different species, and part of the inventory is even rusted. Therefore demand of different species is unbalanced and will experience different change. In a word, Chinese steel market is stepping into the period when all are waiting and seeing so sensitively.