Billet price decline causes Chinese section steel market to soften

Influenced by the decreases in local steel billet prices, section steel prices have also indicated a noticeable weakness in China during the week ending August 24. While prices of angels and channels have continued to rise in the southern Chinese market, in the other regions of the country most section steel prices have registered a significant decrease. As of August 24, the average prices of section steels in the main Chinese cities are as follows:

In the Shanghai market, the price of 50 mm x 50 mm x 5 m steel angles is now at RMB 4,250/mt ($627/mt). The same product is sold at RMB 4,110/mt ($606/mt) in the Tangshan market and at RMB 4,220/mt ($622/mt) in the Guangzhou market. Meanwhile, prices of 160 mm x 65 mm x 8.5 m steel channels stand at RMB 4,200/mt ($619/mt) in the Shanghai market, at RMB 4,150/mt ($612/mt) in Tangshan and at RMB 4,400/mt ($649/mt) in the Guangzhou market. In the Shanghai, Tangshan and Guangzhou markets, 250 mm x 118 mm x 10 m I-beam prices stand respectively at RMB 4,250/mt ($627/mt), RMB 4,240/mt ($625/mt) and RMB 4,250/mt ($627/mt). The prices are all ex-mill, including 17 percent VAT.

During the first half of the past week, section steel prices indicated a steady uptrend; however, prices have dropped down in the second half of the week, resulting in net price decreases for the week. At present, in the Tangshan market, common carbon billets of 150 mm x 150 mm size are priced at RMB 3,760/mt ($555/mt), while prices of low alloy billets are at RMB 3,880/mt ($571/mt). Both prices include 17 percent VAT. Billet prices in the Tangshan market have decreased by RMB 100/mt ($15/mt) in the last week.

Meanwhile, market activity has been very sluggish in China's domestic section steel market as end-users are now acting cautiously in terms of placing new orders. It is expected that the Chinese section steel market will not see any large dips or upticks in the short term.