Construction steel prices up slightly in Shanghai, Beijing

Construction steel prices up slightly in Shanghai, Beijing

Prices of construction steel showed on Friday (September 2) slight increases in the Shanghai and Beijing market, while prices in Guangzhou remained steady after having slid on Wednesday. By the end of the trading day on Friday, the average price of HRB335 rebar in Beijing, Shanghai and Guangzhou was RMB 3’283/ton（$405), up RMB 13/ton （$2） from Thursday. The price of HRB400 rebar in those same markets had risen RMB 3/ton to an average RMB 3’400/ton ($419), while the average price of Q235 wire rod remained steady at RMB 3’333/ton ($411). In Shanghai, HRB335 rebar prices increased slightly. HRB400 rebar and wire rod prices were basically stable. By the end of trading, for second-rate brand names, the mainstream price of 20mm diameter HRB335 rebar was RMB 3’140/ton（$387)，up RMB 20/ton （$2） from the previous day. For 20mm diameter HRB400 rebar the price was RMB 3’350/ton （$413）, while that of 6.5mm diameter Q235 high-speed wire rod was RMB 3’330/ton （$411). Transaction volumes increased following the upward trend of HRB335 rebar prices. Upon opening on Friday morning, some traders’ price quotations were at the level of RMB 3’140/ton, but not many transactions were concluded. During the day, some traders stopped selling their products, deciding instead to observe the market conditions. Other traders increased their price quotations, leading to an increase of RMB 20/ton. The transaction situation of HRB335 rebar was not brisk on Friday, and not many companies went to take deliveries. It was note worthy on Friday that prices in forward contracts for October increased more than RMB 30/ton and had a large transaction volume in the E-business market. HRB400 rebar prices were basically stable. There was a great demand for 18mm diameter and 25mm diameter rebar, and their prices were firm. 25mm diameter rebar was in short supply. On Wednesday, several hundred tons of products produced by Pingxiang Steel came onto the market. Some traders’ current HRB400 inventory was small and the specification was not complete. Q235 wire rod prices were basically stable. In recent days, the price difference of wire rod between various brand names was small. The price difference of wire rod between Handan and Pingxiang Steel was about RMB 10/ton. According to statistics from the Shanghai Bureau of Real Estate, in the second half of this year there will be 10 million square meters of economical houses and 15 million square meters of residencies put into the market. At present, there are nearly 90 million square meters of projects under construction. In August, the finished areas were 246'400 square meters, which was one third of that of January. This indicates that supply exceeds demand. Experts predicted that the total transaction volume will not exceed 7 million square meters for the remainder of the year. The influence of the macro-economic policies will last until the end of 2006 and maybe even into 2007. In Beijing, prices of construction steel on Friday continuously showed a slight upward trend after an obvious increase on Thursday. There was a great price difference between traders’ price quotations and the transaction situation was common. By the end of closing, the mainstream market price of 20mm diameter HRB335 was RMB 3’300/ton（$397); 20mm diameter HRB400, RMB 3’400/ton （$404）; and 6.5mm Q235 high-speed wire rod, R’MB 3320/ton（$400)，up RMB20/ton （$2）from Thursday. There was a great price difference between the quotations of HRB335 rebar. Price quotations of traders ranged between RMB 3’280-3’400/ton （$407-419). Traders held a pessimistic view towards the future of the market due to the rapid growth in prices and stagnant transaction volume. HRB400 rebar price showed a slight increase of RMB 20/ton （$2）. Q235 wire rod price also increased slightly. In Guangzhou, construction steel material prices decreased. Price quotations of traders were weak on Friday, remaining at the same levels seen on Thursday. For second-rate brand names, the price of 20mm diameter HRB335 rebar was RMB 3’410/ton ($420), which was equal to that of last trading day. 20mm diameter HRB400 rebar, fell RMB 10/ton to RMB 3’450/ton ($425), while Q235 high-speed wire rod fell RMB 20/ton to RMB 3’350/ton （$413). On Thursday afternoon, some traders had reduced their prices for HRB335 rebar produced by Shaoguan Steel, Ma Steel and Xiangtan Steel. Thursday’s price quotations of traders were kept at Wednesday’s levels, but still presented a weak trend. Some traders of Shaoguan Steel further reduced their prices by RMB 10/ton. For MaSteel and Tangshan Steel, HRB400 rebar prices also slightly decreased on Thursday afternoon. For MaSteel, 12mm diameter rebar prices decreased RMB 10/ton; prices were basically stable for other brand names. For Tangshan Steel, 14mm diameter rebar was in short supply. It was reported that at the present, Shaoguan Steel reduced its output of HRB400 rebar. In Guangzhou, HRB400 rebar was in short supply. According to some information channels, demand for construction steel material was weak. There will be batches of products arriving to Guangzhou next week, totaling 80'000 tons with five shipments mainly from Tianjin port and two shipments from northeast regions. Some of the products will be transported to surrounding areas such as Shenzhen and Dongguan. Some traders stated that there is no problem selling these products if the market condition gets better.