Chinese flat rolled moving steadily up

SteelOrbis Shanghai Over the past week, the Chinese flat rolled market was stable with normal levels of commercial activity. With a mixed performance in the various regional markets, the price trend still remains strong. Coming up to the end of September, the steel mills announced their ex-factory prices one after another. These were almost equal to the level of current market prices, indicating the mills' cautiousness about the market. With regard to hot rolled, the Chinese market last week saw an increase in all regions. At present, the price of 5.75 mm hot rolled sheet in Shanghai is at about RMB 3,830/mt ($485) – i.e., RMB 50/mt ($6) lower than the price of RMB 3,880/mt ($491) in Guangzhou and RMB 50/mt ($6) higher than the price of RMB 3,780/mt ($478) in Tianjin. This kind of price gap is quite reasonable in the current situation which also provides support for market prices in the short term. Last week, some traders who had concerns about the future market situation lowered their prices. However, this did not affect mainstream prices in the market, the performance of which continues to be relatively strong. Nevertheless, the continuous decline in narrow steel strip prices has put some pressure on hot rolled sheet in recent days. As regards the cold rolled market, prices of cold rolled sheet from the big mills remained stable over the past week, but supply from the medium-sized mills saw an increase in prices. In particular, there were technological problems with Tangshan Steel's cold rolled production line which affected production flow. In this case, supply from Tangshan Steel saw a sharp price increase in all the regional markets. The latest ex-factory prices announced by the various steel mills are equal to the price levels in those major markets, leaving an adequate profit range for their agents. Therefore, traders are not eager to lower their sales prices. Due to the current stance of the steel mills and traders, the market continues to be stable. Furthermore, despite the decline in hot rolled narrow strip prices, the Chinese flat rolled, medium plate and galvanized markets all saw a steady upward trend, resulting in an overall boosting of the Chinese steel market. In the short term, the Chinese flat rolled market is expected to maintain this upward performance.