Plate prices increase on sales among traders

SteelOrbis Shanghai The continuous increase in hot and cold rolled sheet and coil prices, which broke out mainly due to ex-factory price increases of steelmakers also began supporting the medium plate prices in local Chinese markets. Medium plates can be used interchangeably with hot rolled products especially. Therefore, the increase in hot rolled product prices lead consumers to consider medium plates more. However, the demand of end users continued remaining bearish last week and most of the transactions were concluded among the traders themselves, as they thought prices would increase further in March, when the business season starts. Many medium plate traders saw significant decreases in their profits in 2005 due to new capacity introductions therefore they are acting more carefully now. Nevertheless they think the ex-factory prices of medium plates would increase further if iron ore prices go up. Therefore they are trying to stockpile medium plates before prices increase further. Otherwise, ex-factory plates of medium plates may increase much above the current market prices and eat into traders' profits. Steelmakers are also trying to keep their inventories high nowadays with a similar perspective. On February 28, the average price of 16 mm Q235 B in Shanghai, Tianjin and Lecong increased RMB 86/mt ($10) weekly to RMB 3,163/mt ($392/mt), while that of 16 mm Q345 B rose RMB 102/mt ($13/mt) to RMB 3,265/mt ($406/mt).