SHANGHAI, Mar 21 (SMM) – Spot prices of steel are likely to rebound soon as demand recovers and as the market remains bullish.
Prices of steel products in the physical market stayed weak after demand failed to meet expectations. Prices rose briefly post-Chinese New Year (CNY). However, SMM expects demand to recover gradually. Following the end of the two political sessions on March 20, construction sites across China will resume regular operations and this will drive demand.
Traders were bullish as cash flows did not appear to be a serious issue. Some could only get their hands on a few cargoes ahead of the CNY holiday when prices were relatively low for a short period of time. This means that these participants now hold limited stocks with decent cash flows. Others purchased from smaller plants at low prices and thus see little pressure on the capital front.
In addition, some traders continued to offer at higher levels due to losses made from winter stockpiling.
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