China's domestic medium plate market registered a positive performance over the past week on the back of the increased purchase activity of downstream buyers.
Product name | Specification | Category | Average price (RMB/mt) | Weekly change (RMB/mt) | Price($/mt) | Weekly change ($/mt) |
Common carbon medium plate | 20 mm | Q235 | 3,336 | +126 | 489 | +18 |
Low alloy medium plate | 20 mm | Q345 | 3,460 | +155 | 507 | +22 |
16 mm | CCS A/B | 3,683 | - | - | - |
Retaining a downward movement during the past two weeks, medium plate inventories in the various regions have all posted remarkable decreases compared with the levels of previous months; nevertheless, overall inventory is still higher than at the same time last year. When medium plate prices dropped below the price levels of slab in mid-April, some mills decided to implement large-scale production halts and/or carry out overhauling works. For instance, Xicheng Steel suspended operations at its medium plate lines; Chunye Steel halted its medium plate production for nearly two months; Tianjing Steel overhauled its medium plate production line during the week before last; and Shaoguan Steel started overhauling work in the past week. All these moves have contributed to the recent reduction in market supply from second tier mills, which has almost caused the elimination of low-priced materials from the market. Meanwhile, on account of the relatively high cost of materials from first tier mills, there is still a good degree of support for medium plate prices.
Since eastern China will enter the rainy season in June, many construction sites have speeded up construction work so as to finish as much work as possible before the rain arrives. This has also been a factor in the recent increase in purchases made by downstream buyers. Moreover, the slight price increase has also boosted market confidence to a certain extent against the background of the rising trade volume. Most Chinese mills have lately made upward adjustments to their ex-factory prices, with the costs of supplies delivered to distributors coming to RMB 3,200/mt ($469/mt) in the northern regions and RMB 3,300/mt ($484/mt) in the south.
On the export side, although the export rebate adjustment announced in April does not have much impact on medium plate exports, a growing number of mills have begun to produce boron-added medium plate because of the 13 percent rebate granted for this material. Following the example of Tianjin Steel, Baotou Steel and Shagang, it is reported that WISCO is also to supply boron-added materials starting from June.