Chinese medium plate rally fizzles

Chinese medium plate rally fizzles

The early November rally in the Chinese medium plate market was short lived as prices softened over the past week. Led by the Shanghai market, prices slid on a daily basis. Prices in the Lecong and Tianjin markets were weak in spite of the small decrease range. By the end of trading on Tuesday, November 8, 16mm medium plate prices had dropped RMB 47/mt to RMB 3’053/mt ($378). The price of 16mm low alloy plate had dropped RMB 90/mt to RMB 3’115/mt ($386). The reasons are as follows: 1. Commercial activity in the latter part of the past week was not in line with the sharp increase in medium plate prices. 2. The arrival of new batches of products, even though small in number, alleviated the short supply of 12-25mm products. The upward trend driven by the short supply lost its support. 3. As the cost of inventory was low and market prices increased considerably over the previous week, those traders who had abundant products intended to sell their products at a high price level before prices fell again. However, some traders hoped to procure cash by selling their products at a price level somewhat lower compared to the market prices. 4. The decline in hot rolled coil prices influenced the medium plate market, which can be seen most noticeably in the Lecong market. Dealers indicated that the main factor causing medium plate prices to be slashed on Tuesday, November 8, was the decrease in HR coil prices in the Lecong market and the effect that this had on the attitudes of traders. In the Shanghai market, low alloy medium plate prices were lower compared to those of medium plate. The common carbon medium plate inventory in the market was not as high as that of low alloy plate. Therefore, low alloy plate prices declined sharply due to weakened demand. With the arrival of new batches of products and inventory pressure on steelmakers, prices in these three markets might decrease. The medium plate market is likely to see a mild downward trend instead of a considerable decline. In general, the price trend will be dominated by the Shanghai market. SteelOrbis Shanghai