SHANGHAI, Nov 12 (SMM) – Weakened fundamentals eroded prices of spot steel billet and prices of the ferrous complex as of the morning of Monday November 12. The weak trends are likely to extend this week, with limited room for rebounds, SMM believes.  

This morning, SHFE rebar 1901 contract lost nearly 3%, hot-rolled coil slid 1.4%, with iron ore falling almost 1% despite its robust trend last week. 

In Tangshan of Hebei province, spot prices of steel billet rebounded 20 yuan/mt to 3,680 yuan/mt ex-works this morning, after dipping 140 yuan/mt during last week. On Saturday November 10, the price registered the biggest one-day decline since November, close to the lowest in three months. 

Slower demand in the upcoming 2018/2019 winter is unlikely to sustain growth in steel prices, which will also lower output of steel products in the short run, SMM believes. 

Average daily output of crude steel across China Iron and Steel Association (CISA) member mills during October 11-20 dipped 1.83% from October 1-10 to stand at 1.95 million mt, the lowest since the start of September. 

As of October 20, inventories of steel products across CISA member mills continued to grow 2.3% from October 10 and came in at 12.91 million mt.