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Chinese plate producers trim December list prices - 5 December 2011

Key Chinese plate producers have further cut their list prices for December from November as the domestic plate market continues to languish. Traders predict a further slide in spot prices of most types of plate given the lower delivery prices and sparse buying activity.

Last Thursday - 1 December - eastern China’s Shagang cut its December list prices for commercial and low-alloy plate by RMB 230/tonne ($36/t) and those of its ship and container plate by RMB 250/t.

A day later on 2 December, Shouguan Iron & Steel in southern China lowered its plate prices for this month by RMB 230/t for commercial and low-alloy grade, and by RMB 270/t for shipbuilding grade.

The cuts took Shagang’s price for commercial Q235 14-20mm plate to RMB 4,300/t with 17% VAT and Shouguan’s for similar material to RMB 4,400/t with VAT.

The dip in list prices means December materials delivered to dealers will arrive at lower cost, giving room for spot plate prices to soften further, traders tell Steel Business Briefing.

Meanwhile, the central bank’s decision to trim the bank deposit reserve ratio by 0.5% is not enough to quench the steel market’s thirst for finance, sources say. Thus, the appetite for steel among dealers or end users will remain poor at least until after Chinese New Year (22-28 January).

To cope with the weak demand, late last month Shagang stopped its plate mill for maintenance. This could shave its plate output by about 70,000 tonnes.

Given the negative market sentiment, Shanghai dealers were offering Q235 14-20mm plate at RMB 4,250-4330/t ($668-680/t) with VAT, while dealers in Guangdong’s Lecong steel market were pricing theirs at RMB 4,330-4,380/t with VAT. Both were RMB 30-50/t lower from late November.

Chinese domestic commodity plate prices

©SBB 2011

RMB/tonne

 

Incl.17% VAT

Excl.17% VAT

Shanghai

4,250-4330

3,632-3,701

Lecong

4,330-4,380

3,701-3,744

 

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