Slack demand and lower inventories in local Chinese steel plate market

During the week ending July 8, steel plate prices in the Chinese domestic market have been moving upward despite slow market activity.
 
Amid the rebounds in the steel futures market and the upticks in prices of semi-finished steel, iron ore, rebar and hot rolled coil (HRC), steel plate prices have trended upward in the Chinese domestic market. At present, with no improvement in downstream demand, market activity has remained as slack as in the previous period. However, with fewer new arrivals, market inventories have been declining. Meanwhile, as some steel mills have raised their offers, support from production costs has been rising. Under these circumstances, traders are increasingly inclined to raise their prices.
 
In June, the HSBC purchasing managers index (PMI) for the Chinese manufacturing sector was at 48.2, the lowest level in the last nine months. In this context, the domestic steel industry is now under pressure from reduced order tonnages. As for the coming week, the Chinese steel plate market may indicate some slight upward movement.