The fate of global steel market depends that weather the effect of rising production cost would further result in price rise after the Spring Festival this week in the domestic market and Chinese steel mills would opt to hike export offers or rather settle for grabbing volumes..
Although, the rebar futures movement just before the closer kindle hope of surge on opening, China’s steel market may have to face the low demand reality directly after the festival on government measures to cool down.
Chinese steel traders were full of hope and expectation that steel market after the Spring Festival will boom with huge price rises. However, experts have warned the market that excessive expectation of price rise is undesirable. It is also possible that China’s steel market may fall back after the festival, so awareness of risks is needed.
On the other hand, booming market after the New Year would be mainly pushed forward by rising costs, as prices of iron ore and coal are increasing and with a bigger increasing amount.
Thus, we need to wait to watch and see the direction Chinese steel market will take on opening. Our take is that it will go up further.