Chinese plates under the influence of weak demand

SteelOrbis Shanghai Chinese plate export quotations have slightly decreased, while buyers prefer waiting to see further discount. In the domestic market, the prices are stable with less supply. Chinese plate quotations to South Korea dropped by a small margin. A Shandong province based steel mill said their quotation for heavy plate was $530/mt CFR for August shipment, and another steel mill in northwestern China indicated its quotation as $520/mt CFR. However, the buyer is trying to pull the price below $500/mt CFR. Sourced reported that, the quotations to South East Asia have already decreased a little, but the importers are not active in purchases yet. In domestic Chinese market, with further shortage in market supply, Chinese plate prices have continued to remain stable with flat commercial activity last week. Currently the market supply is at a normal level. Leading mills are keeping their deliveries limited; therefore, the market supply mainly relies on those medium and small sized mills. The price support of the leading steel mills is one of the reasons that keep the market prices stable. Especially for thin products, which can only be produced by major mills, supply shortage is observed in all major local markets. Especially the supply of 8-10 cm plates is scarce. Some steel mills reduced their ex-factory prices to a more reasonable level compared with the current market prices. In Shanghai market, the ex-factory price of medium plate is now around RMB 3,500/mt ($440) with a certain profit margin, but it is hard for traders to seek higher profits due to weak trading volume. Even so, the traders are unlikely to lower their prices due to the small amount of supply and still high ex-factory prices. The inventory is at a relatively low level. 16-20 cm supply remains at a normal level, while the supply of thin specifications is short. The supply of wide and thick plate may increase soon. Sources reported that, the wide and thick plate from medium size steelmakers such as Yingkou, Tianjin Steel, and Hanye obtained a very big share in the market. The local market prices are expected to maintain the stable trend with small fluctuations next week.