Domestic spot prices for the major steel products like rebar, billet and HRC in China have plunged on Friday, May 14, following the rally seen this week. Downward movement of futures and Tangshan authorities’ announcement to curb speculations are behind the recent price declines.
Average spot rebar prices in China have lost RMB 273/mt ($42/mt) today, coming to RMB 5,950/mt ($922/mt) ex-warehouse, according to SteelOrbis data. The big part of the rise, seen this week, has been offset by this drop, but the general price level is still higher by 6.8 percent than last Friday.
On May 14, the authorities of Tangshan talked to steel mills and warned them to maintain the market order and prevent sharp speculative price rises. In case of finding any manipulating market information spread by the steel mills, the violators will be strictly punished.
Rebar futures at Shanghai Future Exchange have dropped by the highest possible level of 6 percent today, closing at RMB 5,641/mt ($874/mt)
As a result, local billet prices in China have also dropped by the end of the day. Steel mills in Tangshan have decreased billet prices by RMB 150/mt ($23/mt) to RMB 5,670/mt ($879/mt) ex-warehouse, which translates to $778/mt if to exclude 13 percent VAT. This move is likely to cool the import billet market next week with most imports having already withdrawn their bids.
Local HRC prices in China have plunged by RMB 270/mt ($42/mt) today, coming to RMB 6,375/mt ($988/mt) ex-warehouse. This drop in the domestic market in China may lead to an acceleration of HRC exports in the near future, market sources believe.
$1 = RMB 6.4525