SteelOrbis Shanghai
On account of China's upcoming traditional Spring Festival (18-25 February), the market gradually began to show weak movement during the course of the past week. Meanwhile, medium plate prices climbed up slightly, helped by the curbing of trade levels with the approach of the festival, caused in particular by related rail transport problems.
On February 6, the average price of 20 mm Q235 B in Shanghai, Tianjin and Lecong has risen RMB 34/mt ($4.3/mt) to RMB 3,997/mt ($516/mt), while that of 20 mm Q345 B was up RMB 45/mt ($5.8/mt) to RMB 4,135/mt ($533/mt).
Mills took advantage of the opportunity presented by the pre-festival period to frequently make upward adjustments to their ex-factory prices. For instance, Nanjing Steel, Tianjin Steel and some other leading mills hiked their prices three times in succession within the space of a week or so. The increase range for each price hike was around RMB 30-60/mt ($3.8-7.7/mt). The markets in the various regions subsequently followed suit with rising prices.
At the end of the past week,
Shagang raised its ex-factory prices for HR products by a large margin – a move which grabbed the attention of the market. The price of both HR products and medium
plate soared sharply the following day. Moreover, spurred on by
Shagang's course of action, Wuhan Steel and Anshan Steel also made relevant adjustments to their ex-factory prices.
The slight rise in medium
plate prices may also be attributed to the low trade volume across the Chinese regions caused by the approach of the Spring Festival. With so many migrant workers throughout
China traveling back to their home regions by rail, trains that would normally be occupied with the transport of goods are now instead taken up with ferrying people back home for the holiday. Indeed, this rail transport bottleneck also affects the transportation of the products of the mills even to the local markets in their own provinces.
With regard to imports and exports, because of the good performance in the domestic market, export quotations also rose to a relatively high level. The price of heavy
plate from some medium-scale mills is around $540/mt FOB, showing an obvious increase compared with previous weeks. However, since the price level is too high now, the exports to
Korea saw a considerable decline.
With a view to the future market, no big change is expected before the holiday. However, with many traders already back in their home regions since last week, the market supply may see a decrease, and this could result in a possible price rise.