Chinese medium plate prices on the rise backed by producers’ hikes

During the past week the Chinese medium plate market continued its rising trend, boosted by increased prices from the steel mills. Meanwhile, it is still not clear whether the market will fully accept the mills' higher prices.

As regards overall medium plate inventory in China, in the past week inventory registered a falling trend with a decrease of 5,870 metric tons, down by 0.4 percent week on week but up by 7.8 percent year on year. Meanwhile, purchase activities from the downstream market were slightly on the slack side after the increase in prices.

On the mills' side, prices of medium plate from Tianjin Steel, Shaoguan Steel and Jinan Steel increased by RMB 30-100/mt ($4-15/mt). It expected that the domestic medium plate market will continue to see a rising trend due to the increased prices from the mills, while its seems that the downstream market will be obliged to accept higher prices.

As regards raw materials, a long-term contract price agreement for coking coal has been inked by Japan and BHP Billiton for a 55 percent increase, while Rio Tinto and BHP Billiton have requested a rise of 80 percent in the iron ore contract price. Thus, cost pressure looks likely to increase and the mills will continue to raise their prices.

As regarding shipbuilding plate, prices have climbed up slightly. Even if the market in question expects to see some positive developments in terms of demand and prices, shipowners have been seeking to delay receipt of deliveries or to cancel orders. According to statistics, in January and February this year, approximately 100 new dry bulk ships were delivered worldwide, totaling a capacity of 10.80 million dwt, down 38 percent compared with the originally scheduled deliveries.