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Rising stocks put Chinese plate prices under pressure - 26 June 2012

Rising inventories at retailers are likely to put prices of medium plate under downward pressure, both within China and for export sale, market participants said on Monday. Stocks of plate grew by another 27,600 tonnes or 1.8% over the week of 18-22 June to 1.52mt nationwide, a Beijing steel research institute reported, quoting the latest China Iron & Steel Association statistics.

At the same time the country’s demand for medium plate remains depressed, Platts Steel Business Briefing is told. The hot summer in July-August will depress demand further and seems likely to soften plate prices in tandem, sources said.

A sales official from a plate mill in east China, however, argued that producers would have limited room for further price decreases. At current prices they are already losing RMB 200/tonne ($32/t), he claimed.

Steel traders in east China’s Shanghai noted that export prices of 20mm boron-added commodity-grade plate had already dropped some $10/t over the past two weeks to $590-595/t fob as of Monday.

Domestic prices of the same size and specification plate in Shanghai and Tianjin in north China have dipped by RMB 50-70/t from two weeks ago to the range of RMB 3,900-4,000/t ($615-631/t) including 17% VAT, according to the market sources.

Production cuts from mid-year maintenance work at major Chinese plate makers such as Nanjing Iron & Steel and Jinan Iron & Steel are expected to provide little support for plate prices, the Chinese market sources commented.

 

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