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| TITLE |
High inventory cost saddles pre winter stocking in China |
| WRITER |
administrator |
DATE |
2010-10-29 10:55:27 |
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High inventory cost saddles pre winter stocking in China
Thursday, 28 Oct 2010
When all the dynamics had failed to spruce the market in autumn, expectations are going rife yet again in China as operators looked to pre winter stocking as their only reprieve. Bit nothing seems to be igniting the market place.
It is learnt that the EXW price of rebar is maintaining positive variance with the spot levels. Ground zero market place is squirming under abject lack of demand. Whereas the mills in their customary slow reactivity saddled with burgeoning cost are maintaining bloated levels.
The ensuing anomaly has pushed the market into reluctance as traders, stockiest shy from any inventory built up. The high inventory carrying cost coupled with inevitable sulk in demand during winter has pre empted stocking demand.
It’s reported that the EXW price has stayed above the spot market price for quite a long time and some traders are faced with suspended deficit.
The agony is intensified by obdurate raw material price. It is learnt that despite traders reluctance to indulge in stocking iron ore price levels remain firm owing to tight availability. Indian origin Fe 63/63.5% iron ore fines is offered at USD 158 per tonne CIF Main Chinese port.
On the flip side, desperate measures in production cuts leading to MoM fall in crude output by 5.9% in September (47.95 million tonne) and cost compulsions forbidding underselling by traders will create resistance to downslide.
It can be aptly summed up as ambiguity crystallizing into premature recluse.
Resourced from www.steelprices-china.com |
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