During the week ending July 4, steel plate prices in the Chinese domestic market have continued to decline but at a more rapid rate. Meanwhile, quotations in the market differ significantly. As of July 4, average sales prices of steel plate in the main regions in China are as follows:
Product name |
Specification |
Category |
Average price (RMB/mt) |
Weekly change (RMB/mt) |
Price |
|
Common carbon medium plate |
20 mm |
Q235 |
4,817 |
-53 |
742 |
-8 |
Low alloy medium plate |
20 mm |
Q345 |
4,910 |
-45 |
757 |
-7 |
Shipbuilding plate |
16 mm |
CCS A/B |
5,303 |
-40 |
816 |
-6 |
In the past couple of weeks, semi-finished steel prices have been trending downwards in the Chinese market, forcing domestic steel plate producers to lower their offers. Amid the decreasing production costs, traders are now less confident as regards the prospects for the future market, anticipating further decreases in prices. In this context, market offers differ considerably from each other, with most traders being aggressive in their quotations. However, despite the weakening of prices, buying activity has continued to be lackluster. As some traders report, end-users have again postponed their planned purchases and are only interested in very competitive offers.
According to the data issued by the China Iron and Steel Association (CISA), in mid-June (June 11-20) the average daily output of crude steel in China came to 1.64 million mt, up 15,600 mt or 0.96 percent compared to early June. At present, the interest rate on the one-year bills of China's central bank is 25 percentage points higher than the benchmark interest rate on deposits. Thus, commentators state that there is a big chance of a further hike in the interest rate on deposits. Any interest rate hike would place further pressure on the already weak market. The government's tight monetary policy also forces some steel plate traders to sell off inventories in order to bring in cash. This will result in a further decrease in sales prices in the domestic steel plate market.
During the week in question, end-users have been purchasing just in line with essential requirements, avoiding any increase in inventories. It is expected that China's domestic steel plate market will continue to follow a soft trend in the coming week.