Chinese medium plate prices remain on descending trend

In the past week, the Chinese medium plate market continued to go down, with relatively sharp daily decrease observed in market prices during the second half of the week. In the context of the pessimistic market atmosphere, production recovery that had been stimulated by the previous price rally is unlikely to be curbed in the short term, so the market inventory will keep rising in the future.

In the Shanghai market, despite the limited arrivals of new supplies, market inventory still climbed up by a small margin on account of the sluggish trading performance over the past week. Since most end-side buyers seemed unwilling to buy when prices were on the way down, a big shrinkage was observed in the market trading volume. Following the considerable descending movement in market prices in the past week, some traders with low inventories don't dare to make any sharp downward adjustment to their sales prices in expectations of certain slowdown in further price decline due to the increased costs of new arrivals. However, some other pessimistic traders think that with the downward momentum still available in the current market, medium plate prices cannot be propped only by the costs.

As regards the Lecong market, prices followed the Shanghai market to drop down sharply in the past week. Moreover, affected by the significant slump in hot rolled market in its surrounding areas, local traders have become eager to sell out their materials.

The medium plate prices in Tianjin have fallen to the level of RMB 3,950/mt ($578/mt) in the past week, accompanied with normal levels of new arrivals. It is estimated that the market will go stable at the current level for two or three days and then prices will slide down again in the future.

With the fine-tuning of monetary policy, some traders are worried about the tightening money supply and bank loans, thus looking quite bearish with regard to the future market.