Giant leap for Chinese medium plate prices?

Giant leap for Chinese medium plate prices?

Medium plate in Chinese markets continued to demonstrate a rapid and sharp price increase throughout the past week. The Shanghai market led the way in what would be the first noticeable increase in medium plate prices since mid-July. By the close of trading on Tuesday, November 1, the average of 16mm Q235 common carbon medium plate prices from Shanghai, Tianjin and Lecong was RMB 3’100/mt ($384), up RMB 210/mt ($26) compared to that of October 25. Also, 16mm Q345 low alloy medium plate had gone up RMB 165/mt ($20) over the week to finish at RMB 3’190/mt ($395) on Tuesday. The distinct characteristic of the price increase was that traders were not willing to sell their products at low prices. Traders did not mind the small transaction volume during the price rally that began on October 24. Most of them purposely controlled their sales volume, awaiting a better opportunity to cash in. Many traders stopped selling their products on Friday, October 28, and the price quotations of some traders were relatively high. Prices on that day saw frequent adjustments and continued to go up. By the close of trading, 16mm medium plate prices in Shanghai were up RMB 180-200/mt. The prices increased a further RMB 120/mt on Monday, October 31. Traders resumed selling their products on November 1. The market is expected to be stable with increased business activity. According to market players, new batches of medium plate products recently arrived in Shanghai, supplementing the short supply of 14mm－20mm products. The following are the factors that were influencing the price trend: 1. Leading traders in Shanghai resolved to increase their prices, and other traders followed suit. Traders were not willing to sell products at low prices since they were optimistic about the future of the market. There was no resistance to the price jump. The rise in Shanghai medium plate prices had a great influence on traders in the Lecong and Tianjin market. Traders in the Lecong market increased their prices two days after the price increase in Shanghai. Prices in the Tianjin market did not change much last week due to the transaction situation; however, prices started to increase a small amount on Monday, October 31. 2. Common carbon medium plate inventory was low, and 14mm－20mm products were in short supply. Traders did not purchase large quantities of products from steel mills, as medium plate prices had been locked in a downward spiral since mid-July. Thus market inventory was low, but inventory in steel mills was high. Thick plate and low alloy plate inventories were relatively high, and therefore the increase range was small for those products. 3. Several days after prices began increasing, traders changed their attitude. They started selling their products, preventing the prices from further increasing. Generally speaking, the current medium plate market is now in a position where it can be influenced by very subtle changes. Whether prices will go up or down depends on the transaction situation in next few days. There is the possibility that prices could increase if transaction volume can remain at a high level; otherwise, prices might plummet. After all, there is still a surplus in the market. SteelOrbis Shanghai