Temporary balance for Chinese HR sheet/coil

Temporary balance for Chinese HR sheet/coil

Chinese hot rolled sheet/coil (HRS&C) prices were generally stable over the past week. The limited quantity of new batches of products and the short supply of some specifications lent support to prices. However, such support was not enough to overcome the sluggish commercial activity, which forced traders to adjust their prices. Compared to the previous week, by the end of trading on Monday, November 21, the average price of 5.75mm*1500*C SS400 in Tianjin, Shanghai and Lecong was down RMB 40/mt to RMB 2’933/mt ($363); 2.75mm*1250*C Q235B was down RMB 34/mt to RMB 3’233/mt ($400); and imported 2.0mm*1250*C 08YU was down RMB 100/mt to RMB 3’325/mt ($412), excluding Tianjin. Traders were sensitive to the short supply of specifications, and the price gap between the specifications increased. Traders did not quote the same price for all medium sheet/coil products like before. In the Shanghai market, the current prevailing price of 5.75mm*1500*C SS400 is RMB 2’950/mt ($365), RMB 50/mt higher than that of 6.5mm*1500*C SS400. Market players are paying close attention to Baosteel’s 2006 first-quarter prices, which will be announced soon. While many market players think that Baosteel’s prices will definitely decrease, they have differing opinions on the decrease range. Baosteel’s move might cause the prices of other steelmakers to tumble. On Monday, November 21, Handan Steel lowered its ex-factory prices of 3.0mm and thicker products by RMB 100/mt. Under these circumstances, orders from traders and buyers will not increase considerably. The market condition will stay soft, and there will be limited new batches of products in the short run. Imported products imposed great pressures on thin products. Market sources report that in the Lecong market in Guangdong Province, some traders sold imported products at price levels that were RMB 300/mt lower than those of domestic products. The prices of imported products in the Shanghai market were also lower than domestic ones. Traders are not optimistic about the future of the market, as they think hot rolled sheet/coil prices will likely fluctuate at the current price level in the short term. The factors that will lead to a price fall can be conspicuously seen in the current market condition. However, the hot rolled sheet/coil market will probably remain stable if new batches of products continue to arrive in the markets in small quantities. SteelOrbis Shanghai