SHANGHAI, Jul. 2 (SMM) – Steelease has confirmed that the satisfactory exports of hot-rolled coil reported by steel mills and stable downstream demand despite the onset of low-demand season helped prices hold steady recently.
July’s orders for steel structure and machinery sectors – major consumers of steel coil – saw slower decline compared with June, albeit still low, with orders for steel structures remaining steady and those for engineering machinery edging down 5-10% MoM, both performing better than a year ago. In addition, downstream buyers kept inventories for both finished goods and raw materials low this year at 1-1.5 months. In this context, the onset of traditional low demand period did not lead to significant decline in prices.
However, Steelease believes steel coil prices will unlikely rise in the near term. Many hot-rolled coil producers were undergoing maintenance in June, curtailing output by 5%, and these producers are expected to resume production in July. Although exports from steel mills is helping ease oversupply pressure, the volume was limited compared with the increased supply following mills’ resumption. In this context, hot-rolled coil prices are expected to keep vacillating with a lack of continued demand growth.