It is reported that domestic medium plate market remains quiet in hot Sep season with prices treading on a downward course.
Mysteel analyst Mr Bao Siwen cited Mr Zhang a top manager of a Shanghai-based steel sheet/plate trading firm as saying that "I am still holding a dim view about the market outlook in October, price for the product will continue falling, albeit at a slower pace."
Mr Zhang also presented a brief review on the current market.
1. The slack market demand is here to stay resulted from the global economic slowdown, which pared downstream demand for steel products, especially those medium-and-smaller ones, like the builders and producers of automobiles and appliances. And some of them were forced to slash or idle whole of their operation due to the liquidity strains, export check and spiking raw materials prices, dragging down steel demand significantly.
2. Steel mills see dull exports. Enquiries from overseas customers have fallen from the previous two months. And it's expected the steel export in Sep will be less than the level of the month before, leading to resources back flow to domestic market, which is set to weigh on the market downward.
3. The ex works price cuts from steelmakers have caused a panic mood for traders & end-users. Some first-tier mills like Baosteel have recently slashed their sheet and plate prices by CNY 800 per tonne a move that has contributed to the rapid sheet and plate price fall recently.
Furthermore, the price cut also strengthened the fence-sitting attitude for traders and end-users. Steel mills see their stocks piling up since traders are unwilling to take bulk purchase. Meanwhile, steel mills have gotten some relief with the falling raw materials prices recently like iron ore, coke and scrap, as a result, they restart full scale operation. Therefore, the supply surplus will increase as the new capacity additions come on stream in days to come.
According to Mr Zhang, these negative factors are here to stay in October and the medium plate market has yet to get back on the feet since there are few motives to support the price. He said when asked how to do business in the downturn that traders should be cautious at the moment. Stock hoarding seems reasonless now, we should strike deals to realize quick turnover albeit at a small profits.
(Sourced from Mysteel.net)
