During the week ending December 28, steel section prices switched from an uptrend to downtrend in the Chinese domestic market. Influenced by the Chinese central bank's 0.25 percentage point hike in interest rates on deposits and loans, the semi-finished steel market in China responded quickly with large decreases in prices, followed by decreases in prices of other steel products. As of December 28, the average section steel sales prices in the main regions of China are as follows:
Product name |
Specification |
Category |
Average price (RMB/mt) |
Weekly change (RMB/mt) |
Price ($/mt) |
Weekly change ($/mt) |
Angle |
50 mm x 50 mm x 5 m |
Q235 |
4,620 |
0 |
699 |
0 |
Channel |
160 mm x 65 mm x 8.5 m |
Q235 |
4,663 |
-10 |
704 |
-2 |
I-beam |
250 mm x 118 mm x 10 m |
Q235 |
4,733 |
+16 |
709 |
+2 |
In the Shanghai market, the price of 50 mm x 50 mm x 5 m steel angles is now at RMB 4,680/mt ($707/mt). The same product is sold at RMB 4,480/mt ($677/mt) in the Tangshan market and at RMB 4,700/mt ($710/mt) in the Guangzhou market. Meanwhile, prices of 160 mm x 65 mm x 8.5 m steel channels stand at RMB 4,690/mt ($708/mt) in the Shanghai market, at RMB 4,500/mt ($680/mt) in Tangshan and at RMB 4,800/mt ($725/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 4,700/mt ($709/mt), RMB 4,750/mt ($718/mt) and RMB 4,750/mt ($718/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 4,180/mt ($631/mt), while the price of low alloy billet has fallen to RMB 4,300/mt ($650/mt), both including 17 percent VAT.
On December 25, the Chinese central bank announced a hike of 0.25 percent in the interest rates on deposits and loans. As a result, domestic sales prices of semi-finished products dropped down by about RMB 50/mt ($8/mt). Prices of other steel products subsequently followed suit and also declined. Many steel section producers have started to produce at lower capacity utilization rates, while some plan to carry out overhaul work. Thus, domestic steel section outputs are expected to decrease in the coming period.
In the early days of the week under review, domestic steel section prices continued their uptrend as most producers increased their asking prices. However, the adjustment of interest rates mentioned above caused the mood in the market to become more pessimistic, with steel section prices rapidly switching from an uptrend to a downtrend.
Nevertheless, as costs of raw materials, such as iron ore and coke products, still remain at high levels and do not show any signs of decreasing, it is expected that steel section prices in China will continue to receive some support from production costs.