Due to the declines in raw material prices, the local section steel market in China continued to register further decreases in the week ending May 25. On the one hand, some private sector Chinese mills are now under great pressures from increasing inventory as few bookings have been concluded recently. On the other hand, the inventory situation of domestic traders is generally good as most of them did not book any large tonnages in the previous period. As of May 25, average section prices in the main Chinese cities 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 | 4,066 | -20 | 596 | -3 |
Channel | 160 mm x 65 mm x 8.5 m | Q235 | 4,112 | -48 | 603 | -7 |
I-beam | 250 mm x 118 mm x 10 m | Q235 | 4,240 | -70 | 622 | -10 |
In the Shanghai market, the price of 50 mm x 50 mm x 5 m angle is at RMB 4,130/mt ($606/mt). The same product is sold at RMB 4,000/mt ($587/mt) in the Tangshan market, while it is sold at RMB 4,200/mt ($616/mt) in the Guangzhou market. Meanwhile, prices of 160 mm x 65 mm x 8.5 m channel stand at RMB 4,160/mt ($610/mt) in the Shanghai market, at RMB 4,020/mt ($589/mt) in Tangshan and at RMB 4,350/mt ($638/mt) in the Guangzhou market. In the Shanghai, Tangshan and Guangzhou markets, 250 mm x 118 mm x 10 m I-beam prices stand respectively at RMB 4,200/mt ($616/mt), RMB 4,250/mt ($623/mt) and RMB 4,300/mt ($630/mt). The prices are all ex-mill, including 17 percent VAT.
Billet prices remained on their downtrend early in the past week, but then switched to an uptrend over the weekend. The short-lived increases seen in the middle of the past week were mainly due to increases in the futures markets and other steel markets. Currently, common carbon billets of 150 mm x 150 mm size are priced at RMB 3,750/mt ($550/mt), while prices of low alloyed billets are at RMB 3,870/mt ($567/mt). Both prices include 17 percent VAT.
During the week in question, most major Chinese domestic steel mills reduced their sales prices of section products, which, however, are still higher than market prices. As many production lines have not yet resumed operations, most players are likely to continue to adopt a wait-and-see approach to market activity.