With reports circulating that no agreement is in sight in the annual iron ore price talks, steel prices have been soaring again in the Chinese domestic market. With billet prices maintaining their rising trend, China's domestic medium and large section market has seen another round of price increases. The average prices of the products in question in the major Chinese cities as of March 16 are as follows:
Product Name | Specification | Category | Average Price (RMB/mt) | Weekly change (RMB/mt) | Price ($/mt) | Weekly change ($/mt) |
Angle | 50 mm x 50 mm x 5 m | Q235 | 3,890 | +174 | 570 | +26 |
Channel | 160 mm x 65 mm x 8.5 m | Q235 | 3,964 | +182 | 581 | +27 |
I Beam | 250 mm x 118 mm x 10 m | Q235 | 3,988 | +193 | 585 | +28 |
The main iron ore miners are now seeking price increases of up to 90 percent in the annual iron ore benchmark price talks. As this increase exceeds the maximum price hike envisaged by the Chinese steel producers, negotiations between the sides have already ground to a halt.
The very considerable hikes sought by the miners have provoked a strong increase in billet prices in the Tangshan market. Currently, common carbon 150 mm x 150 mm billet is priced at RMB 3,670/mt ($538/mt), including 17 percent VAT. At the same time, common carbon 165 mm x 165 mm billet is offered at RMB 3,700/mt ($543/mt), while low alloy billet prices stand at RMB 3,790/mt ($556/mt). All the above prices indicate an increase of RMB 100/mt ($15/mt) compared with the previous week.
Medium and large section prices are indicating significant increases on the back of the rising prices of billets, while overall transaction activity has also been on the rise. In the meantime, some traders have started to build up stocks in anticipation of further price increases.
On March 11, Henan Province-based Anyang Steel announced a hike of RMB 60/mt ($9/mt) in its ex-mill prices for angles and channels. On March 10, Shandong Province-based Rizhao Steel raised its ex-mill prices for H-sections, I-beams and channels by RMB 50/mt ($7/mt). On the next day, March 11, the ex-mill prices of channels and angles produced by Chengdu City-based Xinlianshan Steel rose by RMB 20/mt ($3/mt). On the same day, Guangxi Province-based Liuzhou Steel made an upward adjustment of RMB 30/mt ($4/mt) to its ex-mill prices of angles and channels.
For the coming week, section prices are likely to continue to move up if the raw material prices still maintain their increasing trend. The current increases in China's section steel market are basically driven by costs instead of being based on an actual recovery of demand in the end-user market.