Chinese medium plate market rises though trading activity remains low

Wednesday, 17 June 2009 15:42:22 (GMT+3)   |  
       

With the international iron ore talks not yet yielding any result as far as the Chinese side is concerned and as the China Iron and Steel Association (CISA) has declared that it is ready for the failure of negotiations, it is generally thought that a breakdown in the talks is very likely. If this event, some mills in China would have to face a suspension of their production operations. In this context, the Chinese domestic medium plate market showed a considerable rise over the past week.

Product name

Specification

Category

Average price (RMB/mt)

Weekly change (RMB/mt)

Price($/mt)

Weekly change ($/mt)

Common carbon medium plate

20 mm

Q235

3,507

+90

513

+13

Low alloy medium plate

20 mm

Q345

3,625

+120

531

+18

Shipbuilding plate

16 mm

CCS A/B

3,760

+70

551

+10

Having previously indicated quite a weak performance compared to the local markets for other steel products, during the past week China's domestic medium plate market registered a remarkable increase, though without the support of trading activity which has remained at low levels. Some regional markets posted increased prices in the past week due to decreased inventory levels.

Some mills have still not given out their settlement prices for early June which would normally have been released by June 15, as they would prefer to know the final results of the iron ore negotiations before making adjustments to their prices. As regards the mills that have issued their prices, they have announced sharp upward adjustments. Baotou Steel raised its June settlement prices of medium plate by RMB 180/mt ($26/mt) to RMB 3,510/mt ($514/mt), with ordering prices up by RMB 200/mt ($29/mt) to RMB 3,710/mt ($543/mt) for July; meanwhile Liuzhou Steel hiked its prices by RMB 30/mt ($4/mt) for common carbon medium plate; finally, Shaoguan Steel made an overall increase of RMB 50/mt ($7/mt) to its plate prices, with its 20 mm medium plate now offered at RMB 3,610/mt ($529/mt).

On the export side, since the rebate rate for medium plate has been raised from five percent to nine percent, export quotations of medium plate have declined due to the change. In recent days, exporters have been concentrating more on exports of common carbon medium plates, while exports of boron-added plates have begun to decline. Against the background of the positive performance in the Asian markets, 20 mm Q235 medium plate is now offered at $470-480/mt FOB to the export markets for August shipment. Buyers in South Korea and Vietnam seem very confident in the future and have begun to make purchases in quantity in order to build up their stocks.

According to the latest statistics, China's medium plate production in May totaled 5.0599 million mt, down 389,800 mt or 7.15 percent year on year. Average daily production during the month reached 163,200 mt, up by 18,700 mt or 12.95 percent month on month. Meanwhile, medium plate production for the January-May period reached 22.471 million mt, down 3.2794 million mt or 12.74 percent year on year. The above data reflects the further resumption of medium plate production under the influence of the ascending price levels.


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