Chinese medium plate prices post slowdown in uptrend

Driven by the frequent price hikes of the local mills, China's domestic medium plate market moved further up over the past week. Nevertheless, after their relatively big increase, domestic medium plate prices have started to see a certain slowdown in their upward movement.

Over the past two weeks, a remarkable improvement has been recorded in trading activity for medium plate. In the north, leading local mills were operating at reduced capacity due to overhauling works, causing a continuation of the low market inventory situation. Thus, market prices moved up continuously in a context of relatively tight supplies. Nevertheless, since none of the northern mills plan to overhaul their production lines in late May, local supplies are soon expected to recover to normal levels. Moreover, considering the climbing market prices, some mills that had halted their operations have begun to resume production in recent days. Currently, anticipating substantial arrivals of new supplies in the coming period, the market has registered a certain softening, especially as market demand has failed to make a full recovery. In this situation some traders have begun to adopt a wait-and-see attitude to the market so as to avoid potential risks.

In northern China, medium plate produced by Shaoguan Steel saw active trading at the low level of RMB 3,300/mt ($484/mt) in the local market during the past week. As a result of the recent rise in prices, the high stock levels of Shaoguan Steel and Liuzhou Steel saw some consumption. Meanwhile, general market inventory also underwent a consumption process, thus providing positive news for the market. However, after the market prices rose to RMB 3,500/mt ($513/mt) or so on May 18, the trading volume began to shrink and indicate greater slackness. Although some traders still want to push up the price levels, offers as low as RMB 3,430/mt ($503/mt) have been available according to other traders.

As regards the Chinese mills, Angang recently hiked its shipbuilding plate prices by RMB 150/mt ($22/mt), while prices of common carbon low alloy plate have seen an increase of RMB 300/mt ($44/mt), with the new price of 20 mm common carbon plate at RMB 2,860/mt ($419/mt, tax-excluded). On May 15, Xinyu Steel made an upward adjustment of RMB 100/mt ($15/mt) to its ex-factory prices of common carbon low alloy plate and shipbuilding plate, with the new price of 14-20 mm Q235 plate at RMB 3,300/mt ($484/mt). Meanwhile, Xinyu's boiler plate prices have risen RMB 150/mt ($22/mt), with the ex-factory prices of 14-20 mm Q245R at RMB 3,400/mt ($499/mt). In addition, Baotou Steel announced its May settlement price of RMB 3,330/mt ($488/mt) and hiked its June prices by RMB 300/mt ($44/mt).

According to the latest statistics, China's medium plate production in April totaled 4.3352 million mt, down 1.0206 million mt or 19.06 percent year on year. Average daily production during the month reached 144,500 mt, down by 2,400 mt or 1.65 percent month on month. Meanwhile, medium plate production for the January-April period reached 17.446 million mt, down 2.8545 million mt or 14.06 percent year on year.