In the past week, with the ongoing decline in the Chinese medium plate market, many mills have switched to a so-called "value-keeping" sales policy to stimulate sales activity. The sales policy in question means that, if ex-factory prices are significantly higher compared to market prices, mills will give back or compensate the price difference during the middle or end of the month.
Product name | Specification | Category | Average price (RMB/mt) | Weekly change (RMB/mt) | Price($/mt) | Weekly change ($/mt) |
Common carbon medium plate | 20 mm | Q235 | 3,213 | -37 | 471 | -5 |
Low alloy medium plate | 20 mm | Q345 | 3,260 | -65 | 478 | -10 |
16 mm | CCS A/B | 3,733 | -17 | 547 | -2 |
Due to the higher price levels in the south compared to those in the northern market, a significant volume of materials have flowed from Tianjin to Guangzhou and Lecong over the past two weeks. Consequently, market prices in Lecong have registered a continuous decline throughout the past week. The northern materials can easily be sold at price levels RMB 20/mt lower than the mainstream price of RMB 3,400/mt ($498/mt) in the south, while still allowing for a decent profit range.
In Tianjin, although the market has been moving on a downward trend during the past week, prices failed to drop below the barrier of RMB 3,000/mt ($440/mt). Moreover, the flow of supplies to the south has boosted the confidence of players, and so the decrease range has been small over the past week. Currently, the medium plate prices of RMB 3,000/mt ($440/mt) are very close to the imported slab cost to mills of at least RMB 2,900/mt ($425/mt), indicating the great pressure that mills are under.
Meanwhile, Baosteel, Shagang, and Nanjing Steel recently recommenced supplies of their wide and heavy plate to the Shanghai market, implementing the abovementioned "value-keeping" sales policy - thus signifying the determination of first tier mills to regain their local customers following the loss of the export market. It is heard that a certain first tier producer has set its settlement price for medium plate for early April at RMB 3,250/mt ($462/mt). Currently, market prices of first tier materials in Shanghai are around the level of RMB 3,200/mt ($469/mt).
On the export side, quotations have remained fairly stable in recent days. At present, boron-added medium plate is offered at $440/mt FOB, while export quotations of non-boron medium plate are at around $470/mt FOB, with the export prices of shipbuilding plate at $550/mt FOB. The outlook does not look positive for the export market in the coming period.