Northern medium plate market bounces back

SteelOrbis Shanghai Chinese medium plate prices slowed their downward movement in week 45. Following the considerable decrease in the northern market recently, market prices have now rebounded. However, most of the other regional markets still saw either stability or slight decline throughout the last seven days. On November 14, the average price of 16 mm Q235 B medium plate in Shanghai, Tianjin and Lecong increased RMB 7/mt ($1) to RMB 3,557/mt ($452), while that of 16 mm Q345 B increased RMB 15/mt ($2) to RMB 3,675/mt ($466). According to the current price trend, while the market has entered a stage of fluctuation, the trend still remains weak. With the low medium plate inventory coming into November, the medium plate price did not see any increase, showing that traders had become much more cautious about the market. The relevant industry data indicate that China's newly-increased medium plate production capacity will reach 12.1 million mt in 2006. Handan Steel and some other steel mills are in the process of opening production on new lines in October and November. The output of these production lines will mainly be high value-added products, such as shipbuilding plate, boiler plate, vessel plate and other kinds of plate. On the imports and exports side, the export quotation of common shipbuilding plate exported to South Korea remained at about $600/mt FOB. Sources report that the three largest shipbuilding companies in South Korea will increase their shipbuilding plate imports from China in 2007, boosting imports up from 600,000 mt this year to 800,000 mt in 2007. Regarding the outlook for the market in the coming period, great changes are not expected in the short term. Moving on a weak tendency, prices will fluctuate by small degrees. Supplies from the northern region may also affect the other regional markets. If there is any decrease in the next week, it is likely to occur in the southern market.