CHINA July 14 2016 10:06 AM
SHANGHAI (Scrap Register): Many in the ASEAN region are looking forward to September for a pickup in Chinese steel demand, as this is when construction activity resumes following the rainy season and is there-fore expected to positively impact the demand and price of steel, said the Steel Index in a snippet.
This year, however, the situation might be different, as the market has been heavily influenced by developments in the Chinese futures markets, often driven by sentiment and disconnected from steel market fundamentals. The only thing that seems to be certain, is that price volatility is here to stay.
Market sentiment in ASEAN countries was weak in early June, prompting traders to sell off their cargoes even if meant doing so at a loss. Other traders went short, offering HRC between $5-10 a ton below mills’ asking prices.
This created a downward price spiral and by the end of the month Chinese mills’ offers (on a CFR basis) stood at around $345/t and $330/t for SAE and SS400 grades, respectively.