Due to steel mills price hike lately some Chinese steel traders start to increase their winter storage near the end of the year. This situation leads larger trading volume between businesses when small traders increase winter storage meanwhile large traders increase shipments. However procurement enthusiasm of end-users seems still not high.
Mr. Chen from Beijing Chang Yu Shun Thai Trade Co Ltd said because of downtime of most construction sites in Beijing their main target market the trading volume and shipment are not good. They have increased some winter shortage and there are still some inventories left.
With general EXW price hike and expectation of price rise of main northern steel mills such as Shougang and Hebei Iron and Steel, some traders said that they do have plans to increase winter storage but under unclear change trend in future steel market are still cautious during operation so the purchase has not been large so far.
Lai Xiaojing analyst from Trade Futures holds that construction steel price is stable and with high inventory and weak demand there is limit increasing possibility. The price is likely to be dominated by consolidation.
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Tuesday, December 22, 2009
Chinese steel traders increasing inventory to combat winter storages
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