As a result of the continuous fall of the Chinese medium plate market, trading activity has been curbed in recent days, accompanied by a gradual ascension of market inventory. At present, medium plate inventories in the various regions are at high levels, and are likely to drive down market prices if no improvement is recorded in commercial activity in the near future.
Product name | Specification | Category | Average price (RMB/mt) | Weekly change (RMB/mt) | Price($/mt) | Weekly change ($/mt) |
Common carbon medium plate | 20 mm | Q235 | 3,553 | - | 518 | - |
Low alloy medium plate | 20 mm | Q345 | 3,685 | -5 | 540 | -1 |
16 mm | CCS A/B | 4,233 | -7 | 621 | -1 |
Currently, one of the main concerns in China's medium plate market is the production situation at the various mills. Given the reduced plate prices and high price levels of both domestic and imported slabs, many rolling mills have had to suspend their operations in recent days in order to avoid incurring losses. While plate output from second and third tier mills has continued to decrease, China's domestic first tier mills have announced continuous reductions to their medium plate prices, with their current ex-factory prices almost equaling the levels of materials from second and third tier mills. In the context of such fierce price competition, it is believed that, if the domestic market fails to climb up in the coming period, a growing number of mills will be forced to halt production operations on account of escalating cost pressure, and this in turn may fundamentally alleviate the current imbalanced relationship between supply and demand.
Even with new arrivals at normal levels in the past week, medium plate inventory in the domestic market still climbed up continuously due to the sluggish sales performance. Although many traders have mentioned that the local medium plate market has received a certain degree of support from the steady upward movement of hot rolled prices during the past week, arrivals have been exceeding sales in recent days. Thus, high inventory is expected to constitute a significant problem for the future market.
In addition, the Beijing municipal government has imposed certain restrictions on transportation so as to guarantee transportation safety for the forthcoming National Day celebration. As a result, the Beijing market is expected to experience some difficulties in terms of transport of steel, and the northern market will also be impacted to a certain extent.
Overall, given the limited presence of positive factors, the Chinese medium plate market is still expected to continue its fluctuating trend in the near future.