Chinese plate market moves up slightly after holiday

SteelOrbis Shanghai After the National Day Holiday, market prices moved up slightly, while commercial activity was sluggish. On October 10, the average price of 16 mm Q235 B in Shanghai, Tianjin and Lecong increased RMB 56/mt ($7) to RMB 3,703/mt ($468) while that of 16 mm Q345 B was up RMB 50/mt ($6) to RMB 3,815/mt ($482). Sources reported that the market saw a slight increase in its stock during the holiday. However, compared with the previous year, this did not mean big inventory pressure. Some traders indicated that the trading volume shrunk sharply during the holiday. Due to the downstream demand situation, sales mainly came from the processing industry rather than the steel structure industry. The small demand of the steel structure plants can be regarded as one of the reasons for the bearish market performance. After the National Day Holiday, steel mills hiked their ex-factory prices one after another. The market showed a corresponding reaction with a slight increase in prices. Market performance in northern China was better than that in the south. For example, in the southern region, the Lecong market saw stable prices both before and after the holiday with bearish commercial activity. In comparison, in the northern region, Tianjin market prices climbed up after the holiday, with an improved trading performance. As regards the steel mills, their exports for October continued to be good. The export quantities of some steel mills are equal to the level of September, or even higher. In addition, South Korean shipbuilding plants have reached an agreement with Japanese steel mills on the shipbuilding plate prices from October 2006 to March 2007. The price set for Q4 this year is at $600/mt while that for Q1 next year is at $610/mt - about $50/mt higher than Chinese export prices. Although many traders indicate that the market is quite sluggish, the steel mills are unlikely to lower their prices due to the good export situation. Under the pressure of costs, the market will continue stable for a period of time. For the next week, market fluctuations are expected to be limited to a small range.