Chinese plate mills are happy with exports

SteelOrbis Shanghai Chinese plate market continued the strong upward trend during last week, with brisk commercial activities in entire China. The supply in domestic market has decreased continuously because of strong exports, and even some specifications were unavailable at all. Because of the shortage of products in domestic markets, whenever the leading steel mills adjust their prices, the local market prices increase dramatically. This is especially true in Tianjin and Lecong markets. On June 5, Shaoguan increased its medium plate prices RMB 200/mt. After that, Lecong market prices saw rapid increases in RMB 200-250/mt range. On June 6, Tianjin Steel hiked prices by RMB 100/mt and the market responded accordingly once more. The medium plate inventory in Shanghai market is less than that of the previous week. While traders in Lecong and Tianjin generally reflect that the supply are in short. For example, the supply of 8 mm medium plate is quite tight in all regions. Even there are some 8 mm products in the market; these are mostly HR sheet products. At present, the prices of heavy plate, for example the medium plate with thickness above 30 mm, began to go up with shortage in supply. Due to a possible decrease in export tax rebate, steel mills are spending much efforts on completing exports before the execution of such a policy. The shortage of supply in domestic markets is mainly due to this approach. On the import and export side, the quotation of Jinan Steel to Turkey is at around $590-600/mt FOB. The company is mainly selling products to its regular customers only, because of short supply. Some steel mills have also given offers to South Korea at $570/mt CFR, and a steel mill in northeastern China even offered products at $620/mt CFR S. Korea. The rapid price increase, drove prices to a close level to the highest price of the previous year. A recent quotation of Chinese medium plate to Italy is at Euro 550/mt CIF level. The market is currently quite active. There are neither positive, nor negative developments in the market to affect the current situation. However, a probable increase in domestic supply will lead market prices to decline. Nevertheless, the domestic market is still expected to see stable price increases next week.