During the past week ending March 22, the Chinese steel section market has been following a slight uptrend, mainly due to the upticks in semi-finished costs. However, with the latest upward adjustment by the Chinese central bank of the deposit reserve requirement ratio by 0.5 percentage points effective as of March 25, the central government's policy of controlling the domestic real estate market looks set to have an increased influence on the steel market. In this context, market players have become more anxious about the prospects for the future market. Despite the slow recovery of market demand, the overall transaction volumes are still at low levels. As of March 22, the sale prices of steel sections in the Chinese domestic market 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 |
4,530 |
+36 |
688 |
+5 |
Channel |
160 mm x 65 mm x 8.5 m |
Q235 |
4,642 |
+30 |
705 |
+5 |
I-beam |
250 mm x 118 mm x 10 m |
Q235 |
4,726 |
+22 |
718 |
+3 |
In the Shanghai market, the price of 50 mm x 50 mm x 5 m steel angles is now at RMB 4,750/mt ($722/mt). The same product is sold at RMB 4,500/mt ($684/mt) in the Tangshan market and at RMB 4,780/mt ($726/mt) in the Guangzhou market. Meanwhile, prices of 160 mm x 65 mm x 8.5 mm steel channels stand at RMB 4,730/mt ($719/mt) in the Shanghai market, at RMB 4,530/mt ($688/mt) in Tangshan and at RMB 4,900/mt ($745/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 4,780/mt ($726/mt), RMB 4,640/mt ($705/mt) and RMB 4,830/mt ($734/mt). The prices are all ex-mill, including 17 percent VAT.
At present, the price of common carbon billets of 150 mm x 150 mm size in the Tangshan market has increased to RMB 4,170/mt ($633/mt), while 165 mm x 225 mm size is now priced at RMB 4,200/mt ($638/mt), both including 17 percent VAT. Meanwhile, sales activities for semi-finished steel products have weakened as compared to the previous week. Given the increases in billet prices, steel section prices have trended up slightly in the past week.
In the eastern region of China, the government's tight monetary policy is expected to exert greater pressure on traders' cash flow. The slump in the steel futures market has also hurt confidence in the spot market. In the southern region of China, with hot rolled coil and construction steel prices declining, the price uptrend of the local steel section market has met with greater resistance. Meanwhile, in the north, market activity has been slow.
In the short run, it is thought that the domestic steel section market in China will probably follow a soft trend.