Prices lower in weak medium plate market

SteelOrbis Shanghai Due to the bearish commercial activity and strengthening of macro-control measures, the Chinese medium plate market began to see a downward trend over the past week. On October 17, the average price of 16 mm Q235 B in Shanghai, Tianjin and Lecong decreased RMB 16/mt ($2) to RMB 3,687 /mt ($466), while that of 16 mm Q345 B was down RMB 25/mt ($3) to RMB 3,790/mt ($479). During the past week, the market was stable on the whole. However, towards the end of the week, the market gradually became weaker with a slight decrease in prices seen every day. Currently, traders are quite cautious about the future. Some traders took the initiative in lowering their prices because of the sluggish commercial activity. With decline in all the local markets, prices are unlikely to go up in the near future. Even if the steel mills again hike their prices, sales and inventory will still put greater pressure on traders. Recently, the quotation of Chinese heavy plate exported to South Korea increased $20/mt. The quotation of heavy plate shipped in January 2007 is at $500/mt CFR. The three largest mills in China have already finished quotations for this year. As reflected by the steel mills, exports are in good condition. In the short term, the expansion in exports can weaken the impact of growth in domestic supply. However, once exports shrink, Chinese medium plate prices will drop sharply. As regards macro-control measures, the Central Government is strengthening these. In this political environment, market players are not optimistic about the future due to the reduced downstream demand. For the next week, the market is expected to continue this weak trend and is likely to see further slight declines.