Over the past week China's domestic medium plate market has generally moved on an upward trend on the back of the increased ex-factory prices issued by various local mills.
Product name | Specification | Category | Average price (RMB/mt) | Weekly change (RMB/mt) | Price ($/mt) | Weekly change ($/mt) |
Common carbon medium plate | 20 mm | Q235 | 3,700 | +97 | 543 | +14 |
Low alloy medium plate | 20 mm | Q345 | 3,810 | +85 | 559 | +12 |
Shipbuilding plate | 16 mm | CCS A/B | 3,940 | +27 | 578 | +4 |
Given the expectations of increased raw material prices in the future, domestic finished steel prices in China have started to climb up in recent days. As anticipated in many reports and by market players, iron ore prices will inevitably go up next year, thereby also driving up steel production costs. In this context, many mills have recently adjusted their ex-factory prices in an upward direction. In the past week, Magang, Shaoguan Steel, Tianjin Steel and some other leading mills all hiked their ex-factory prices of medium plate. Thus, given the relatively high costs of new materials, market prices have begun to move on a rising trend.
During the past week, the markets in eastern and southern China have observed slack trading activity due to the rainy weather, while in the north transportation has almost been blocked by heavy snowfalls. However, in spite of the scarcity of concluded deals and the transportation difficulties, domestic medium plate prices still retained their steady upward movement, being little affected by the weak trading performance. It is generally accepted that the market has been boosted by costs, and currently players are not eager to sell off materials at low levels. Nevertheless, when the snow melts in the coming period, the northern market is expected to see significant arrivals of new materials, which may result in slight fluctuations in market prices; however, overall, the new arrivals are not expected to have much impact on the domestic market.
One of the factors that will have a negative influence on the future market is the decrease observed in new bank loans in October in China. The country's new RMB loans in October totaled RMB 253 billion, down RMB 263.7 billion compared with the previous month - evidence of a tightening of capital supply, to which local market players are always sensitive.
In addition, China's medium plate production in October totaled 5.092 million mt, up 494,300 mt or 10.75 percent year on year. Average daily production during the month reached 164,300 mt, up by 100 mt or 0.07 percent month on month. Meanwhile, medium plate production in China for the January-October period reached 47.7689 million mt, down 3.3019 million mt or 6.47 percent year on year.