SteelOrbis Shanghai
Medium
plate prices decreased around RMB 150-200/mt ($419-425) week on week in local Chinese markets. In the beginning of last week, the prices were quite stable with only a little decline, but with the shrinking
trading volume, the market players became more eager to sell their products.
Currently, most traders are hurrying to sell as many products as possible. They expressed their main sales objective for the time being as to reduce the inventory and accelerate selling. The prices can be negotiated on the basis of the quantity. Traders are willing to sell, no matter if the prices are below the market price level. Therefore, there is a large gap between the prices offered in the market and actual deal prices. Some more pessimistic traders even sharply lower their prices, resulting in the confusion on market prices.
In spite of the decrease in prices, the
trading volume is still at a relatively low level. The end-users said that because of the excessive increase in earlier times, the market prices still have a large decrease range. So they prefer to wait and see.
The market inventory has increased compared with the previous weeks. The curbed exports caused the domestic inventory to begin increasing. Although the overall inventory is at a low level, it still has a great impact on the market. In addition, the sharp drop of various HR product prices also has some impact on the medium
plate market.
On the steel mills' side, only very few mills decreased their prices, while the others even increased their prices further. The medium
plate price policy announced by Wuhan Steel in the end of June has seen a sharp increase, but Wuhan Steel's products are mainly for end-users. Therefore, the increase will not boost the market prices.
On the import and export side, with the shrinking
shipbuilding industry in
Japan, Japanese steel mills are not intending to increase their
shipbuilding plate production and it is hard for the South Korean steel mills to greatly increase their
shipbuilding plate production capacity in the short term. Therefore, S. Korean
shipbuilding and heavy
plate imports from
China will grow continuously. Chinese steel mills are expected to play a greater role in
shipbuilding plate market in the future.
Looking at the positive side, the stable prices of steel mills may support the market, because traders have to sell at a relatively high price level considering their costs. In addition, the stable medium
plate prices in international market also support the domestic prices. On the negative side, the continuous sluggish commercial activity, lackluster purchases of the end-users and the macro-control measures all have a great impact on the market. With the coexistence of positive and negative factors, the future market is still in the downward trend. Yet a rebound may be expected when the prices decrease by a large margin.