SHANGHAI, May 10 (SMM) – Hot-rolled prices across major spot markets in China dipped with thin trading on Wednesday May 9 as traders were keen to offload their cargoes on worries over the upcoming rainy season and the reluctance among buyers given current high prices, SMM learned.
Prices declined 20-50 yuan/mt across major markets including Shanghai, Lecong and Tianjin on May 9. The price decline came afters a week of upward movements in hot-rolled prices. Offers in east and south China broke 4,200 yuan/mt last week.
Traders were inclined to release their cargoes as they were concerned that high prices would deter buyers and that the imminent rainy season would weigh on demand. However, some traders with low stocks are likely to stockpile at low prices.
Steel mills, driven by high profits, were also keen to cash in. Profits at steelmakers have climbed steadily since April as steel prices rebounded. As of May 9, mills with blast furnaces were likely to see profits of 1,248 yuan/mt on iron ore of $67.25/mt.
High prices kept buyers on the sidelines, and they purchased as required. Overall trading was thin even after some mills lowered offers.
Despite decline in prices in the short term, SMM expects hot-rolled prices to rebound in the future given low inventories and brisk demand.
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