Raw material prices of the ferrous industry kept rising last week amid frequent mine accidents and expanding safety inspections.

Spot prices of rebar will face downward pressure to recover this week as supply still firms at high levels and end-users demand has yet to shake off the impact of seasonality, which continues to weigh on market sentiment and deter shipments. Nonetheless, the spot prices will be underpinned on optimism that the recent outbreak of COVID-19 cases in Beijing is under control with a decline in confirmed cases in the city and on expectations of stepped-up purchases ahead of the three-day Dragon Boat Festival holiday. 

Inventories of hot-rolled coils of steel sheets used to produce home appliances and cars in China continued to trend lower this week, indicating that demand remains robust and spot prices are likely to see further upside.

SMM data showed that HRC stocks across social warehouses and steelmakers decreased 3.16% in the week ended June 11 to 3.59 million mt, marking the 13th straight week of declines.

Crude steel output across major mills in China averaged 2.09 million mt per day in the last 11 days of May, up 0.58% from the level seen in the second 10 days of the same month and nearing the record high of 2.11 million mt notched in mid-September 2019, according to data from the China Iron and Steel Association (CISA) released Wednesday.

Crude steel output across major mills in China averaged 2.08 million mt per day in the second 10 days of May, marking the second highest on record, according to data from the China Iron and Steel Association (CISA) released Friday.

Operations at Chinese manufacturers of flat-rolled copper products slowed in April, as backlogged orders had been fulfilled and as the COVID-19 lockdown restrictions dealt a blow to the demand that have already been weak.

Crude steel output across major mills in China averaged 2.05 million mt per day in the first 10 days of May.

While production expands, inventory pressure at steel plants continued to reduce on the back of growing consumption, and this may provide upward momentum in near-term steel prices. 

Inventories of hot-rolled coils of steel sheets used to produce home appliances and cars in China fell for an eighth straight week this week, as demand remained robust. SMM data showed that HRC stocks across social warehouses and steelmakers decreased 2.31% in the week ended May 7 to 4.45 million mt. That was smaller than a 4.6% fall in the previous week due to the Labour Day holiday and improved arrivals.