Plate traders reducing offers to pull down ex-factory prices

SteelOrbis Shanghai Steel mills' price setting time is approaching. Therefore, great differences began to appear among the prices of different markets, leading to confusion on market prices. The traders of different mills are lowering their prices based on the price-setting date of their suppliers, so as to seek a better ex-factory price. On the exports side, the offer prices of exported hot rolled coil and medium plate from China to South Korea are still at a relatively high level. With sluggish commercial activity, Chinese steel mills' medium plate quotations are above $600/mt CFR. However, sources reported that the deal prices for September shipment to S. Korea decreased around $50/mt from the previous weeks. In domestic market, the average price of 16 mm Q235B in Shanghai, Tianjin and Lecong was down RMB 90/mt ($11) at RMB 3,370/mt ($422), and that of 16 mm Q345B was down RMB 45/mt ($6) at RMB 3,590/mt ($450) on July 25. Since the medium plate prices in Tianjin dropped too fast in earlier times, they rebounded after touching the bottom this week. Meanwhile, the prices in other regions continued the downward trend. On the other hand, the leading steel mills in northern China reached an agreement in the second half of last week to raise their ex-factory price level to RMB 3,470/mt ($435). After the rapid increase in market prices, the prices in Tianjin have almost reached the other markets. But there is still an evident inversion between the market price and ex-factory price. In Lecong, the market prices are in a stable decline, with a constant decrease rate. Yet, the end users are not willing to accept the prices. Traders have adopted a “wait-and-see” attitude, and some of them have reduced the quantity of their orders for the next month, which may result in market supply decline. For the next week, the market is expected to maintain the downward trend with a probably fluctuation, because of the flat commerce.