Medium plate prices see dull performance

SteelOrbis Shanghai Over the past week, the medium plate market saw a dull performance, with a slight decline being observed in various regions. Affected by the market performance, the price level became cautious on the whole, in spite of the rising ex-factory prices of the mills. By the end of trading on January 23, the average price of 20 mm Q235 B in Shanghai, Tianjin and Lecong has decreased RMB 20/mt ($2.6) to RMB 3,920/mt ($504), while that of 20 mm Q345 B was down by RMB 30/mt ($3.9) to RMB 4,025/mt ($517). Due to the shrinking trading volume, China's medium plate market has lost its upward momentum and has begun to experience fluctuations instead. However, the mills nevertheless continued to hike up their ex-factory prices again and again, with the result that their price level now seems far too high for the market to accept. During the previous week, the prices in the Tianjin market had already fallen below cost level – evidence of the mills's excessively high ex-factory prices. Then over the past week, the southern market, which had been moving steadily upward, also began to back off and show some signs of a decline. Some market insiders explain that the price decreases result from capital pressure on some traders. For example, in the Shanghai market, some leading traders sold their products at prices RMB 20-30/mt ($2.5-4) lower than the market prices, so as to recoup as much capital as possible. At present, the market is seeing sluggish commercial activity. Since many projects have been concluded on the downstream side, demand has dropped dramatically. Furthermore, the buyers have not yet commenced their stocking purchases due to the lateness of the Spring Festival this year. Thus, the trading volume is not expected to expand in the short run. With regards to market inventory, it seems that levels have fallen a little compared with the previous week. The high ex-factory price levels will help prevent a fall in the market prices. Therefore, the market can be expected to continue its dull performance over the coming week. Meanwhile, various traders will make some small price adjustments based on their own inventory, costs and other factors.