SteelHome reported that China construction steel market continues showing an upward trend recently as demand picks up.
Data from SteelHome website show that on March 30th 2011, the HPB235 high speed wire rod, 20mm HRB335 and 20mm HRB400 rebar are sold at the price of CNY 4,731 per tonne, CNY 4,742 per tonne and CNY 4,907 per tonne in China's 28 major markets. This represents an increase of CNY 47 per tonne, CNY 59 per tonne and CNY 59 per tonne respectively compared with March 22nd 2011.
A construction steel distributor from Beijing said that "Now, as the weather turns better, the trading volume has greatly improved, with daily shipment of about 15 million tonnes. Our construction steel stocks also decline by over 10,000 tonnes in recent one month."
Data from SteelHome website show that on March 25th 2011, construction steel stocks in Beijing were 788,000 tonnes, down 10,000 tonnes compared with March 18th 2011.
The construction steel market in Guangzhou shows similar circumstances, too. Daily shipments in Guangzhou reach over 2,000 tonnes due to the improved market demand.
One distributor in Guangzhou said that "As market prices have little room to fall further after bottoming out, end users began to increase procurement."
On March 25th 2011, construction steel stocks in Guangzhou declined for four consecutive weeks to reach 785,600 tonnes, down 7,100 tonnes compared with March 18th 2011.
On March 25th 2011, construction steel stocks in Shanghai were 763,000 tonnes, down 12,000 tonnes compared with March 18th 2011.
Overall, since mid March 2011, demand has been gradually picking up in China construction steel market and stocks fall down slightly. On March 25th 2011, stocks declined for two consecutive weeks to 10.6587 million tonnes in China's 28 major markets, down 0.1845 million tonnes compared with March 18th 2011.
Meanwhile, China construction steel price is also bolstered up by the rising China domestic billet price. Billet prices at China home market began to surge since March 23rd 2011. Up to March 30th 2011, Q235 and 20MnSi billet in Hebei was priced at CNY 4370 per tonne and CNY 4480 per tonne respectively, representing a rise of CNY 210 per tonne compared with March 22nd 2011.
Currently, construction steel stocks remain at a high level despite of the good performance in transactions. Thus, distributors are not confident enough to show strong optimism towards the market outlook.
One distributor in Shanghai said that "Demand from end-users is expected to release further during the peak season, which will continue boosting transactions. Thus, we are actually reluctant to sell in large quantity, as the price is very likely to continue rising in a short run."
Distributors in Beijing also hold an optimistic view towards the market outlook, thinking the price is expected to reach CNY 5,000 per tonne.
However, in Guangzhou, market is full of pessimistic sentiments. Construction steel price in Guangzhou has increased by over CNY100 per tonne. Furthermore, stocks still stay at a high level. If stocks cannot fall further, the price is unlikely to extend the upward trend. Distributors in Shanghai also agree that only low inventory can ensure China construction steel price to rise further.
( Source: www.steelguru.com )