Local Chinese steel section market boosted by low inventory and high upstream costs

In the past week, Chinese domestic steel section prices have again moved on a strong upward trend.
 
In the Shanghai market, the price of 50 mm x 50 mm x 5 m steel angles is now at $424/mt. The same product is sold at $396/mt in the Tangshan market and at $429/mt in the Guangzhou market. Meanwhile, prices of 160 mm x 65 mm x 8.5 mm steel channels stand at $411/mt in the Shanghai market, at $397/mt in Tangshan and at $457/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 $422/mt, $411/mt and $435/mt. The prices are all ex-mill, including 17 percent VAT. Steel section prices in the Chinese domestic market can be viewed in the table below.

As for billet, prices in the Chinese domestic market have indicated significant increases during the past seven days. In Tangshan, the current price of Q235 150 x 150 mm square billet is at RMB 2,360/mt ($364/mt), the price of 165 x 225 mm rectangular billet stands at RMB 2,390/mt ($369/mt), while the price of 20MnSi billet is at around RMB 2,480/mt ($383/mt). The prices are all ex-mill, including 17 percent VAT.

Overall trading activity in the local Chinese steel section market has been at normal levels during the past week. Higher billet prices and low steel section inventory levels have contributed to the strong increases in domestic steel section prices in the past week. Traders in the market are generally optimistic at present. However, there are concerns that the large price increases seen up to now could increase the possibility of a correction of prices. As for the coming week, it is believed that the domestic steel section market may fluctuate at current price levels.

$1 = RMB 6.48