Medium plate price inversion between market prices and steel mill prices

SteelOrbis Shanghai Chinese medium plate market saw a slight decline over the past week, while at the same time steel mills hiked their prices, leading to a price inversion situation. On September 26, the average price of 16mm Q235 B in Shanghai, Tianjin and Lecong decreased RMB 23/mt ($3) to RMB 3,647 /mt ($461), while that of 16 mm Q345 B is down RMB 35/mt ($2) to RMB 3,765/mt ($476). Last week, all the regional markets saw price inversion situations. Sources reported that, due to the bearish commercial activity throughout the whole week, traders were forced to lower their prices. However, the increase in ex-factory prices of all the leading steel mills evidently supported the market in such a weak situation. It is said that the decrease over the past week cannot be a representation of the future trend. On the market supply side, the market experienced shortages from Yingkou due to its overhauling schedule; therefore, products from this mill took the lead in price increase. Over the past week, the supply arrival of some products sufficiently affected the high market prices, with these consequently dropping back down to reasonable levels. The price hike of the steel mills makes it hard for traders to manage their profits and prices. At present, most traders are being cautious about the future. With the coming holidays, traders are gradually transforming the market emphasis from sales to capital safety for the next week. On the imports and exports side, the export quotation of Chinese medium plate to Southeast Asia is at $500-520/mt CFR, the spot quotation of shipbuilding plate is at $560-575/mt CFR. The quotation of Chinese SS400 medium plate shipped in November is at $ 520/mt CFR Southeast Asia. It is expected that the market will maintain a stable or slight downward trend. When it comes to the National Day at the weekend, the big traders will all be on holiday. As a result, the expected decrease in supply will lead to a slight price rise; however the mainstream market trend will not be affected much.