Data: SHFE, DCE market movement (Aug 12)

[India] Domestic steel and scrap prices have edged up slightly on Wednesday but demand remains subdued and buying interest is still limited. Several primary steel producers are under maintenance, reducing mill buying and raw-material consumption. Ship-breaking Melting scrap prices in Alang edged up 2.10USD/tonne on Monday to 346USD/tonne ex-yard (33,000INR/tonne). In northern Mandi Gobindgarh, HMS 1&2 (80:20) up by at 1.05USD/tonne (100 INR/tonne) to 353USD/tonne del Mandi consumer (33,700 INR/tonne). Meanwhile, In Southern, HMS 1&2 (80:20) remained flat to 325 USD/tonne del Chennai consumer (31,000 INR/tonne). Chennai sponge iron PDRI up by 2.10USD/tonne to 275USD/tonne del Chennai consumer (26,250 INR/tonne). Chennai rebar prices edged up to 490USD/tonne ex-works (46,700 INR/tonne). Monsoon conditions and weak construction activity are likely to keep demand soft in the coming week. Prices are expected to remain stable to slightly soft with limited downside and no major correction expected in the near term.

The People's Bank of China announced that, to better match the short-term liquidity needs of the banking system, it will conduct overnight reverse repo operations on August 14 and from August 17 to 19, using a fixed-rate, quantity-based tender, with a daily operation volume not exceeding 600 billion yuan.

The most-traded hot-rolled coil futures contract rose initially then fell back today, closing at 3,239, up 0.19% day-on-day. Supply side, the impact from hot rolling maintenance this week was 216,000 mt, down 39,900 mt WoW. Next week, the impact from hot rolling maintenance is expected to be 116,100 mt, down 99,800 mt WoW, but production remained relatively low. Demand side, the off-season saw end-users mainly trading at low prices, with market activity weaker than the previous trading day. Raw material side, hot metal essentially hit bottom and is expected to rebound slightly afterward. Combined with the approaching delivery of near-month coking coal and coke contracts, the tight spot supply will lead to stronger futures performance, and the cost support from coking coal and coke remains intact. Affected by the typhoon, inventories in some markets were destocking this week, but the sustainability is expected to be limited. Looking ahead, as sheets & plates themselves remain in the off-season, this will limit the rebound height. However, considering that cost support from below is solidified in the short term, sheets & plates are expected to consolidate on a strong note.