Chinese medium plate market regaining strength?

Chinese medium plate market regaining strength?

A pick up in transactions on Tuesday (October 25) saw Chinese medium plate prices regain the ground that they had lost during the past week. The price decline during the first half of the past week was due mainly to high inventory levels and weak demand from end users. The Shanghai market initiated Tuesday’s comeback, and markets in other cities quickly jumped on the bandwagon. The influence of the China Iron and Steel Association’s (CISA) symposium held last Friday (October 21) is one of the major reasons the medium plate prices picked up. Upon the opening of trading on Monday (October 24), a leading trader in the Shanghai market increased prices RMB 80/ton higher than the actual deal prices. Staff at that company indicated that the owner was optimistic about the future of the market because it seems prices may go up in the short term. Towards the end of trading on Tuesday (October 25), the prices of most traders had gone up, and increasing number of them quoted high prices. Prices of other products were in an upward trend, and thus bolstered the medium plate prices. Construction steel and HRS&C prices went up, leading to an increase in medium plate prices. Also, demand from end users strengthened due to the price increase of hot rolled sheet/coil. Traders in the Tianjin and Lecong markets increased their prices in response. In the Tianjin market, prices were relatively stable. Tiangang, a leading brand name in the Tianjin market, restricted the quantity of products sold to the market. Tiangang refrained from selling their products to traders for nearly ten days, hoping to reduce the inventory in the market and thus make the price decline come to an end. So far, the high inventory level in the market has been alleviated. Market players feel that this is one of the key factors that has led to stable medium plate prices in the Tianjin market. However, Tiagang’s move meant that its own inventory went up sharply. On Friday (October 21), Tiangang began to sell its products to traders in small quantities. Tiangang has also idled a blast furnace for an overhaul checkup, which will affect half of its output. This move will have some effect on traders, but not much of one on market inventory. Traders point out that high inventory is the factor that prevents prices from increasing. The current medium plate price is below than that of rebar, meaning prices really cannot afford to go any lower. The future market trend of medium plate is likely to follow that of other products. SteelOrbis Shanghai