Weak demand and varying prices in Chinese section market

During the week ending May 11, the Chinese domestic section market indicated some weakness in demand. On the whole, the domestic large and medium size section market has shown variation in price levels as a result of the lack of stability in semi-finished prices. As of May 11, average section prices in China's main cities are as follows:

In the Shanghai market, the price of 50 mm x 50 mm x 5 m angle is at RMB 4,380/mt ($643/mt). The same product is sold at RMB 4,250/mt ($623/mt) in the Tangshan market, while it is sold at RMB 4,300/mt ($630/mt) in the Guangzhou market. Meanwhile, prices of 160 mm x 65 mm x 8.5 m channel stand at RMB 4,400/mt ($645/mt) in the Shanghai market, at RMB 4,220/mt ($619/mt) in Tangshan and at RMB 4,480/mt ($657/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 4,430/mt ($650/mt), RMB 4,450/mt ($652/mt) and RMB 4,380/mt ($642/mt). The prices are all ex-mill, including 17 percent VAT.

Currently, common carbon billets of 150 mm x 150 mm size are priced in the range of RMB 3,960-4,020/mt ($580-589/mt), the prices of common carbon billets of 165 mm x 165 mm size are at RMB 4,050/mt ($594/mt) and low alloy billet prices are at RMB 4,140/mt ($607/mt). Current billet offers indicate significant variation in the market.

Traders have been waiting for an improvement in market demand after the May Day holiday (May 1-3); however, given the fluctuations in the global financial markets, the spot steel markets have been negatively affected. At present, China's domestic section market is characterized by a pessimistic mood.

As for the coming period, China's section steel market is expected to continue to be influenced by the uncertain economic outlook. Market players are thought likely to maintain a wait-and-see stance under the current conditions.