China’s medium plate market registers a rebound

The Chinese medium plate market initially continued its declining trend at the beginning of the past week; subsequently, however, prices gradually became stable on the back of the rise in the hot rolled market, before registering a minor rebound at the end of the week.

Considering the recent strong macroeconomic performance in China, the positive situation in the local real estate market and also the rise in spot prices of hot rolled coils, Chinese traders believe that it is now a good time to push up prices after the long-standing sluggishness in the medium plate market. At present, however, no significant support has been observed from market inventory and from the general market atmosphere for the latest climb in prices, and so it is difficult to tell whether the price rise is a temporary correction of the previous declining trend or the beginning of a genuine turnaround.

As regards inventory, the strong downward pressure exerted by current high inventory levels means that ideal conditions do not exist for a market increase. As a result, the current price increase is most likely just a temporary correction.

When the market became stable in the past week, certain improvements were seen in commercial activities in the north; meanwhile, there were many inquiries in the eastern and southern regional markets, but with few deals concluded. Currently, still pessimistic as regards the future, most players are adopting a cautious approach to market trading.

In recent days, market prices of second tier materials have continued to stand at around RMB 3,400/mt ($499/mt). On the other hand, as a result of frequent price cuts, the ex-factory prices of medium plate from some first tier mills are now lower than the ex-factory prices of materials from second tier mills. Overall, the Chinese medium plate market is expected to move mainly on a fluctuating trend in the near future.