Trader adopts ‘coupled sales’ amidst soft market
One of Lianyuan Steel's sales agents reportedly adopted over the weekend (October 15–16) a “coupled sales” policy in the Lecong hot rolled sheet/coil market.
According to the agent's policy, if a customer were to purchase heavy and thin HR coil at the same time, the agent would quote the customer a price RMB 200-300/ton ($24-36) lower than the market price.
Sources report that the adoption of the policy is due both to the lack of activity in the market and the high inventory of thin products. On top of that, traders face capital problems.
Some traders of other brand names in the Lecong market indicated that this policy disrupted the order of the market by causing a great amount of pessimism to take hold. In Lecong, 2.0mm and thinner products of other steelmakers showed noticeable price declines today (October 17).
Lianyuan Steel will focus on
production of 3.0mm and thinner products in the future. Batches of new products from Lianyuan Steel will arrive in the Lecong market soon.
SteelOrbis Shanghai