SHANGHAI, Jul 8 (SMM) – Major Chinese steelmakers are expected to see 151,000 mt of their hot-rolled coil (HRC) deliveries arriving at Shanghai, Lecong and Tianjin, three major Chinese markets this week, slightly up 3,000 mt from last week, showed an SMM survey.
Shanghai
About 55,000 mt of deliveries from major steel mills are expected to arrive at Shanghai in the week ended July 7, down 2,000 mt from the previous week. Arrivals at the eastern market remain at low levels in recent week, keeping the market tightly supplied and offering strong support to spot prices. That, combined with positive macro environment, encourages traders to hold their quotes firm, and HRC spot prices in Shanghai are expected to remain firm and rangebound in the short term.
Lecong
Arrivals at Lecong are expected to rise 6,000 mt from the previous week to 85,000 mt this week, as mills including Guangxi Shenglong Metallurgical, Liuzhou Iron & Steel and Angang Chaoyang have stepped up their deliveries. That will add to the already high inventory pressure in that southern market, and weigh on prices, which have taken a hit as cash flow issues force traders to speed up sales. Heavy rainfalls slowed the deliveries of rebar from traders, and that, together with increased supply from HRC mills, led to cash flow issues for traders.
As the rainy season in South China is about to end, prices of rebar will rebound on the recovery of operations at construction sites, and spot prices of HRC there will follow higher.
Tianjin
HRC supply and demand in Tianjin will be still in a tight balance as arrivals this week remain low. SMM expects about 11,000 mt of HRC deliveries from major steel mills to arrive at the northern market in the week ended July 8, down 1,000 mt from the prior week. HRC spot prices in Tianjin are likely to continue to hover in a tight range in the short run, as low stockpiles deter traders from reducing quotes while cautious purchases limit upside in prices.
