As a result of the frequent and considerable upward adjustments made by various mills to their ex-factory prices, the Chinese medium plate market registered a rapid increase over the past week. Although many players had anticipated this market ascension, the margin of the increase exceeded general expectations.
Product name | Specification | Category | Average price (RMB/mt) | Weekly change (RMB/mt) | Price ($/mt) | Weekly change ($/mt) |
Common carbon medium plate | 20 mm | Q235 | 4,217 | +320 | 617 | +47 |
Low alloy medium plate | 20 mm | Q345 | 4,425 | +350 | 648 | +51 |
16 mm | CCS A/B | 4,397 | +314 | 644 | +46 |
Chinese domestic plate prices soared sharply in recent days. In the early days of August, almost all second tier medium plate producers have hiked their prices by at least RMB 500/mt ($73/mt). As a result, the new price of 14-20 mm Q235 plate from Zhaoshun and Huawei is at RMB 4,430/mt ($649/mt), while 14-20 mm Q235 plate from Changda is offered at RMB 4,460/mt ($653/mt), with Shanggang's price standing at RMB 4,400/mt ($644/mt). Feida raised its prices by RMB 550/mt ($81/mt), with its new price of 14-20 mm common carbon plate rising to RMB 4,500/mt ($659/mt). Additionally, Jinan Steel made an overall upward adjustment of RMB 300/mt ($44/mt) to its prices of medium plate and heavy plate, with its 20 mm plate now being offered at RMB 4,300/mt ($630/mt). In particular, Shagang increased its prices sharply, by RMB 720/mt ($105/mt). In this context, the Chinese medium plate market, which had been on a gradual rising trend, posted a sharp upward jump. Indeed, faced with growing costs, traders have no choice but to follow the trend of the mills' ex-factory prices without consideration of market acceptance. However, even though market prices have picked up by RMB 150/mt over the past two days, the mills' prices are still higher than the market levels.
The rapid rise of China's medium plate market, which has exceeded the expectations of most market observers, has occurred against a background of flat trading activity domestically and of slackness in the export market. Obviously, trading activity and demand levels are no longer the main focus of the current market, and players have to pay closer attention to the mills' price adjustments and production schedules.
On the slab side, some domestic mills are offering their slab for August shipment at RMB 4,000/mt ($585/mt), which is even higher than medium plate prices in some regional markets. As regards the import market, it is also hard to conclude deals for imported slab. With import quotations generally at around the level of $480/mt CFR China, the costs of importing slab are almost equivalent to the levels in the domestic market for August, and entail a higher risk factor.