Chinese section steel prices quicken their rising pace

Propelled by the increases in iron ore, coking coal and billet prices, section steel prices in China have seen a certain acceleration in their uptrend during the week ending December 14. As of December 14, 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 4,600/mt ($692/mt). The same product is sold at RMB 4,470/mt ($672/mt) in the Tangshan market and at RMB 4,650/mt ($699/mt) in the Guangzhou market. Meanwhile, prices of 160 mm x 65 mm x 8.5 m steel channels stand at RMB 4,620/mt ($695/mt) in the Shanghai market, at RMB 4,500/mt ($677/mt) in Tangshan and at RMB 4,750/mt ($714/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 4,620/mt ($695/mt), RMB 4,730/mt ($711/mt) and RMB 4,700/mt ($707/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 risen to RMB 4,190/mt ($630/mt), while the price of low alloy billet has increased to RMB 4,310/mt ($648/mt), both including 17 percent VAT. The prices have registered an increase of RMB 20/mt ($3/mt) from the previous week. However, few transactions have been concluded at the abovementioned levels.

With many smaller rolling mills stopping production, billet demand has decreased, resulting in reduced momentum for billet price increases. Besides, many traders are adopting a cautious approach towards the market and do not plan to replenish their billet inventories for the time being. However, as iron ore and coking coal prices are still relatively high, billet prices are expected to trend sideways at elevated levels.

During the week in question, the Chinese section steel market has been characterized by a strong upward trend. Apart from the increasing production costs, the rising trend observed in other steel product markets is also a principal factor in the current uptrend seen in the domestic section steel market. Over the past week, the ex-mill prices of section steel products offered by domestic producers have risen by RMB 20-100/mt ($3-15/mt), thereby also contributing to the high prices of section steel in the domestic market. On the demand side, however, market activity has slowed down after the mills announced increases in their prices. It is thought that domestic section steel prices will probably rise slightly in the coming period.