Chinese medium plate prices roaring dramatically

SteelOrbis Shanghai China's medium plate prices have seen a great increase in the country's various regional markets since the beginning of 2007. On January 10, the average price of 20 mm Q235 B in Shanghai, Tianjin and Lecong was at RMB 3,910/mt ($501/mt), RMB 220/mt ($28/mt) higher compared to a week ago; while that of 20 mm Q345 B was sharply up by RMB 250/mt to RMB 4,030/mt ($517/mt). Even the traders and the mills are surprised to see such a strong rise. According to their experience, January is usually a period of slack demand when it is still early for buyers to stock up. With regard to the situation over the past year, the market prices maintained an upward and steady trend for a relatively long period of time. However, the traders always displayed caution regarding their levels of commercial activity. Towards the end of 2006, in virtue of their good exports, some mills moved to push up their ex-factory prices. Subsequently, market prices began to increase under the pressure of rising costs. Furthermore, mills generally arrange overhauling at the end or beginning of the year. For example, Maanshan Steel, Xinyu Steel, and Shaoguan Steel carried out overhauling work on their medium plate production lines in December. Meanwhile, Tangshan Steel and Linfen Steel are scheduled to overhaul their medium plate lines in mid-January. All the above mills can be regarded as the leading medium plate producers in China and any overhauling work they perform has a certain impact on the market. The latest figures released by the China Iron and Steel Association (CISA) indicate a good medium plate exports situation. China's medium plate exports reached 456,795.15 mt in November, up 227.42 percent year on year and up 123,037.1 mt or 36.89 percent month on month. Total exports in the Jan-Nov period amounted to 3.5519908 million mt, up 155.64 percent year on year. Imports in November, on the other hand, reached 90,094.38 mt, down 1.31 percent year on year and up 12,420.42 mt or 16.0 percent month on month. Total Jan-Nov imports amounted to 933,663.2 mt, down 13.19 percent year on year. As regards the market situation in the period ahead, the current expectation is that prices will go back down again.