Chinese domestic steel prices literally zoomed last weak. The steel prices in China rallied for a fifteenth week in a row bolstered by surging production and speculative demand resulting abnormally high stockpiles. The current scenario can be aptly summed up as “A crazy period featuring high production, high stockpiles and high price.”

The Chinese Long Product Price Index CLPPI improved by whooping 387 points, whereas the Chinese Flat Products Index CFPPI increased by 390 points. The overall price index CHISPI increased by 389 points.

CLPPI - Chinese Long Product Price Index
CFPPI - Chinese Flat Product Price Index
CHISPI - Chinese Steel Price Index

PI - Product Index

PI - Product Index

To know more about these indices please visit
http://steelprices-china.com/spi_services/spi.html

Most marketers admit the positive effects brought by the central government’s stimulus plans however they suspect its’ sustainability as stocks have not been effectually digested in proportion to its increment. The simmering of price debacle could be sensed with slight fall in prices towards the week end

Long Products - Surge backed by hike in mill prices

PI- Product Index

1. Billets: - Propelled by finished products rally

Chinese billet prices have surged supported by demand from narrow strip and rebar producers. Prices have soared by CNY 600 per tonne since end July.

In Shandong, Jiangsu area, EXW prices of 150x150mm billet in Q235 grade have touched CNY 3,900 per tonne (USD 570 per tonne), on a cash payment basis including 17% VAT.

Billets
150*150
Q235

Change is on August 7th 2009 as compared to July 31st 2009
Change is per tonne

2. Rebars - Shagang leads the price explosion

Month had an august opening for Chinese rebar prices. 3rd August can be marked as a defining moment in the run up to the market revival commencing in April 2009. The spurt although anticipated astonished everybody by its magnitude.

The rebar prices hike peaked at CNY 400 per tonne (USD 58) at Jinan averaging at CNY 281 per tonne (USD 41) a leap of 6% within two days.

The rally in the re bar prices was harangued by the Eastern Chinese steelmaker Shagang announcing a massive price increase of CNY 600 per tonne (USD 88 per tonne). The ramifications of this hike was far and wide affecting the major markets

This tumult had ripples in the rebar futures prices on the Shanghai Futures Exchange SHFE which jumped by CNY 185 per tonne (7%) on 3 August from 31 July.

The sharp movements are speculative primarily driven by unexpected price hike announced by mills setting the tempo for restocking by end users and stockiest to avoid dearer purchase latter. However, fundamental reasons like healthy liquidity and real consumption have been the fountain of this turnaround.

The ballooning prices will fly high if there is no downward pressure on it. However it is apprehended that growing market inventory could provide the pressure to pull the balloon down.

However towards the week end the tide seemed to be subsiding as the stocks piled in absence of demand and the prices plummeted by CNY 150 per tonne to CNY 200 per tonne.

Rebars
20mm
HRB 400

Change is on August 7th 2009 as compared to July 31st 2009
Change is per tonne

3. Wire Rods - In tandem with rebar prices

Wire rod market also moved in tandem with rebar prices last week

WRC
6.5mm
Common

Change is on August 7th 2009 as compared to July 31st 2009
Change is per tonne

Flat Products - Continue golden run

PI- Product Index

1. Hot Rolled Coils - Price blows hot on hike by mills

The price hike in Chinese steel market is uncharacteristically supplier driven rather than demand pull. Mills have been unilaterally pushing prices in a bid to drum up market sentiments devoid of solid demand.

The efforts have been bearing fruits over the last 20 weeks with consistent improvement in prices. The ascendancy reached a pinnacle with a jerk of CNY 232 per tonne (USD 34) or 5% in a span of 3 days during July 31st to August 4th.

In this multiplayer show, Eastern China’s Shagang mill yet again emerged as the star of the show announcing a mind boggling USD 100 per tonne hike in HRC prices on month opening.

The commercial hub Shanghai responded with alacrity with a jump of CNY 200 per tonne or 5% since 31st July in HRC prices. The hike was widespread ranging from CNY 120 per tonne in Lanzhou to CNY 330 per tonne in Nanjing.

HRC
4.75mm
Common

Change is on August 7th 2009 as compared to July 31st 2009
Change is per tonne

2. Plates - Prices rise on speculation

Chinese domestic plate prices improved in anticipation of increases in September prices.

Majors like Wuhan Iron & Steel increased its September EXW prices for commercial plate by CNY 300 per tonne .Eastern Chinese mills Baosteel and Shagang are also expected to revise prices on the same line.

Rapidly rising HRC prices is also responsible for the surge in plate spot price as it is viewed as an indicator of flat products market trend.

Plates
20mm
Common

Change is on August 7th 2009 as compared to July 31st 2009
Change is per tonne

3. Cold Rolled Coils - Prices keep improving

CRC prices maintained an upward momentum backed by strong HRC prices. Market is rife with the expectation that steel giant BaoSteel will certainly hike September prices.

In the commercial hub of Shanghai, prices of 1.0mm CRC from a major producer went up by CNY 300 per tonne within the week. Likewise in Guangzhou, similar material from another major producer jacked by CNY 250 per tonne for the same period.

This anticipation has set in a bullish sentiment in the market as players are aiming to ratchet offer prices to maximize profit, despite fear of a burst since demand lags.

CR
1.0mm
Common

Change is on August 7th 2009 as compared to July 31st 2009
Change is per tonne

4. Hot Dipped Galvanized - Keeps hot band trend

HDG
0.5mm
Common

Change is on August 7th 2009 as compared to July 31st 2009
Change is per tonne

To know more details on steel prices subscribe to services of www.steelprices-china.com by registering or send a mail to admin@steelprices-china.com with contact details. Kindly note that this is a paid service with subscription charges of USD 750 for 12 months.

(Sourced fromwww.steelprices-china.com)