The price difference between hot rolled coil (HRC) and rebar in the Chinese domestic market turned positive again in early December after remaining in the negative zone for about a month. Market observers attribute this change to the healthier market fundamentals of HRC compared to rebar in the country and the strengthening of prices of the former.
As of December 28, China's Q235 4.75 mm HRC spot price was 36 Yuan/ton ($5.1/ton) higher than the national price of HRB400E 20 mm diameter rebar. Previously, the price difference was constantly negative from November 1 to December 7. Domestic consumption patterns of hot rolled coil and rebar in China differed in December. It was stated that hot rolled coil usage in China reached approximately 13.1 million tons this month and increased by 1.5% compared to the previous month.
On the contrary, weekly rebar usage fell to a very low level of 2.2 million tonnes during the same survey period; This marks the third consecutive week of decline and represents a more significant decline of 7.6% compared to 5.5% in the previous period.
Typically, the current quarter is a strong season for Chinese manufactured goods, including autos and white goods, due to rising sales. An analyst in Shanghai noted that manufacturing companies saw an increase in sales activity, especially in December, as year-end promotions became more widespread.
In November, China's rebar prices managed to surpass hot rolled coil prices. According to observations, rebar spot prices are also gaining strength from market optimism that Beijing will announce new real estate incentives.
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