Chinese section steel market generally stable with small decreases in north

Following the previous upticks observed in the Chinese section steel market, prices finally leveled off in most domestic regions during the week ending November 23. In the northern region, however, prices have shown some weakness under the influence of the decreases in billet prices. On the back of higher production costs, it is thought that domestic section steel prices will not indicate any large decreases in the coming period. As of November 23, the average section steel sales prices in the main regions of China are as follows:

In the Shanghai market, the price of 50 mm x 50 mm x 5 m steel angles is now at RMB 4,480/mt ($675/mt). The same product is sold at RMB 4,320/mt ($651/mt) in the Tangshan market and at RMB 4,580/mt ($690/mt) in the Guangzhou market. Meanwhile, prices of 160 mm x 65 mm x 8.5 m steel channels stand at RMB 4,480/mt ($675/mt) in the Shanghai market, at RMB 4,350/mt ($655/mt) in Tangshan and at RMB 4,580/mt ($690/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 4,500/mt ($678/mt), RMB 4,550/mt ($685/mt) and RMB 4,630/mt ($697/mt). The prices are all ex-mill, including 17 percent VAT.

In the Tangshan market the price of common carbon billets of 150 mm x 150 mm size has dropped to RMB 3,990/mt ($600/mt), while the price of low alloy billet has decreased to RMB 4,110/mt ($619/mt), both including 17 percent VAT. The prices have registered a decrease of RMB 110/mt ($17/mt) from the previous week. The decreases have been mainly due to lackluster demand and the previous softenings observed in the finished steel market. Despite the recovery of the domestic finished steel markets in the period in question, the billet market has not yet followed suit. As of last Friday (November 19), rolling mills in the Fengrun district in Tangshan, Hebei Province, have suspended operations for five days due to an order from local government. This is bound to exert a certain impact on the local billet market.

While the construction steel and flat steel markets were switching from a downtrend to an uptrend, prices in the local section steel market remained almost unchanged over the past week. In Hebei Province, both producers and traders have lowered their offers on the back of declining billet prices. Meanwhile, few transactions have been concluded in this region. In other regions, despite the weak activity in the market, the overall performance has been stable. With production costs rising, there is not much room for large decreases in the market in the coming period. Moreover, the rebound in other steel product prices in China will likely hinder any declining tendency in domestic section steel prices.