Steel price levels have gradually firmed up during November emanating clear signal of improving fundamentals in the twilight of 2013. A slew of positive change in fundamentals has kindled price hike by 1% within the 1st 5 days of the November. Given the volatility in market it cannot be taken as trend within such short time span. However one cannot gloss over the factors culminating in optimism.

1. Steel inventory has declined by 2.7% w-o-w touching 14.04 million tonnes by the end of last week. The stock of rebar dipped 3.8% over the same period to 5.464 million tonnes.

2. Steel output volume in Mid-October is estimated at around 2.107 mln tonnes, slipping by 1% from one month ago.

3. China’s manufacturing PMI in Oct extended the rising trend for the fourth month to 51.4%, standing on the peak in the past 18 months.

HSBC’s estimation for PMI in mainland China is positive at 50.9, the highest for seven months.

Third Session Meeting of the Communist Party from Nov 9 to Nov 12 is raising expectation about release bullish news for national economy.