Every cloud has a silver lining and this proverb is more than true in the dragon land which always has an ace up its sleeve. China can be written off only for the pleasure of ignorant. H2 2011 had a lackluster passage with unexpected silence in all quarters of consumption. Despite production cuts and rather resilient iron ore prices finished prices remained depressed prevailing over all fringe factors for price hike other than demand.
If H2 was a victim of sinking European and US economy the two major trading partners of China the advent of 2012 brought with it bellied expectation of much sought after revival. Despite sunken inventory levels and healthy iron ore prices the spark was missing all through. The table below brings to the fore the dilapidated market sentiments with 1 % decline in prices with the first 10 days.
The period between New Year and the commencement of Lunar Holidays is reminiscent of brisk buying of raw material and finished period as the mills stockpile before holidays on one hand whereas the market operators unleash their appetite after the winter vacation. Seasonal hike in demand and prices after the Lunar Holiday certainly pricks speculative buying. However in times of defying tradition activity has been retrogressive.
The maximum brunt being borne by the long product prices signifies acute silence in the key infrastructure and construction segment. A cash strapped economy with lending rates touching dizzying heights has taken a sever toll on investment in both public and private sector.
Certainly the government has been able to accomplish its much cherished goal of reining inflation being subdued to a palpable 5%. Conversely it has taken a heavy toll on growth which has is expected to hover around 8% in 2011.
Objectively desperation is setting for aspirations. With inflation manageable the setting might be just right for the PBOC to rethink on its restrictive policy. Lending rates might be lowered with the continuance stability till lunar break.
At the same time global economies USA in particular and EU in general are sensing the first signs of turnaround in more than a year. US industrial production improving and the employment plunging it seem on steady course. Recently Italy and Spain the ailing members after Greece have sold their bonds at unusually lower yield rates indicating that things were not as bad as it was made out to be. Even though the EU nations can barely be called out of dark but halo of positivism is enough to enliven the global economies.
Post Lunar Holiday when the spring merges into summer the economic activities peak in China. Seasonality aided by graduated easing in lending rates would catalyze a soggy economy. At the same time growth in demand from the US and Europe will give definite direction and acceleration to production. Domestically production pruning affected over H2 has led to inventory depletion and the traders stockiest would certainly quench their needs supported by augmented liquidity and investment.
The truth behind the façade might be sweet for a change.
The Chinese Long Product Price Index CLPPI has gone down by 71 points last week whereas the Chinese Flat Products Index CFPPI has also gone down by 15 points. The overall price index CHISPI declined by 40 points.
| Class | 06-Jan | 13-Jan | Change | % |
| CLPPI | 7651 | 7580 | -71 | -0.9% |
| CFPPI | 6726 | 6711 | -15 | -0.2% |
| CHISPI | 7127 | 7087 | -40 | -0.6% |
CLPPI - Chinese Long Product Price Index
CFPPI - Chinese Flat Product Price Index
CHISPI - Chinese Steel Price Index
Long Products
| Category | 06-Jan | 13-Jan | Change | % |
| PI-WRC | 7635 | 7551 | -84 | -1.1% |
| PI-Rebar | 7670 | 7614 | -56 | -0.7% |
PI - Product Index
Flat Products
| Category | 06-Jan | 13-Jan | Change | % |
| PI-PLTS | 5976 | 5964 | -12 | -0.2% |
| PI-HR | 6877 | 6861 | -16 | -0.2% |
| PI-CR | 6953 | 6939 | -14 | -0.2% |
| PI-GP | 6574 | 6560 | -14 | -0.2% |
PI - Product Index
These indices have base of 10,000 as on July 1st 2008
To know more about these indices please visit
http://steelprices-china.com/spi_services/spi.html
1. Long products
Billets
150*150
Q235
| Location | CNY | USD |
| Shanghai | -50 | -8 |
| Jiangsu | -50 | -8 |
| Shandong | 0 | 0 |
| Fujian | 0 | 0 |
| Guangdong | -50 | -8 |
| Henan | -30 | -5 |
| Hebei | -50 | -8 |
| Shanxi | -50 | -8 |
| Liaoning | -50 | -8 |
| Yunnan | -40 | -6 |
Change is on Jan 13th as compared to 6th Jan 2012
Change is per tonne
WRC
6.5mm
High Speed
| Location | CNY | USD |
| Shanghai | -40 | -6 |
| Hangzhou | -40 | -6 |
| Nanjing | -70 | -11 |
| Wuxi | -30 | -5 |
| Jinan | -50 | -8 |
| Hefei | -150 | -23 |
| Fuzhou | -210 | -33 |
| Nanchang | -100 | -16 |
| Guangzhou | -50 | -8 |
| Nanning | -90 | -14 |
| Changsha | -70 | -11 |
| Wuhan | -70 | -11 |
| Zhengzhou | -120 | -19 |
| Beijing | -60 | -9 |
| Tianjin | -90 | -14 |
| Baotou | 0 | 0 |
| Shijiazhuang | -50 | -8 |
| Taiyuan | 0 | 0 |
| Shenyang | 0 | 0 |
| Changchun | 0 | 0 |
| Harbin | -30 | -5 |
| Chongqing | 0 | 0 |
| Chengdu | 0 | 0 |
| Guiyang | -50 | -8 |
| Kunming | -20 | -3 |
| Xian | 0 | 0 |
| Lanzhou | 30 | 5 |
| Urumchi | 0 | 0 |
Change is on Jan 13th as compared to 6th Jan 2012
Change is per tonne
Rebars
20mm
HRB 400
| Location | CNY | USD |
| Shanghai | -20 | -3 |
| Hangzhou | -20 | -3 |
| Nanjing | -10 | -2 |
| Wuxi | -30 | -5 |
| Jinan | -40 | -6 |
| Hefei | -70 | -11 |
| Fuzhou | -160 | -25 |
| Nanchang | -100 | -16 |
| Guangzhou | -90 | -14 |
| Nanning | -80 | -13 |
| Changsha | -60 | -9 |
| Wuhan | -40 | -6 |
| Zhengzhou | -100 | -16 |
| Beijing | 0 | 0 |
| Tianjin | -40 | -6 |
| Baotou | 0 | 0 |
| Shijiazhuang | 0 | 0 |
| Taiyuan | 0 | 0 |
| Shenyang | -20 | -3 |
| Changchun | 0 | 0 |
| Harbin | -20 | -3 |
| Chongqing | 0 | 0 |
| Chengdu | 0 | 0 |
| Guiyang | 0 | 0 |
| Kunming | -40 | -6 |
| Xian | 0 | 0 |
| Lanzhou | 60 | 9 |
| Urumchi | 0 | 0 |
Change is on Jan 13th as compared to 6th Jan 2012
Change is per tonne
Angle
#5
| Location | CNY | USD |
| Shanghai | 0 | 0 |
| Hangzhou | 0 | 0 |
| Nanjing | 0 | 0 |
| Wuxi | 0 | 0 |
| Jinan | 0 | 0 |
| Hefei | 0 | 0 |
| Fuzhou | 0 | 0 |
| Nanchang | 0 | 0 |
| Guangzhou | 0 | 0 |
| Nanning | 0 | 0 |
| Changsha | -50 | -8 |
| Wuhan | -30 | -5 |
| Zhengzhou | -40 | -6 |
| Beijing | -30 | -5 |
| Tianjin | 0 | 0 |
| Baotou | -50 | -8 |
| Shijiazhuang | -30 | -5 |
| Taiyuan | 0 | 0 |
| Shenyang | -50 | -8 |
| Changchun | -40 | -6 |
| Harbin | 0 | 0 |
| Chongqing | 0 | 0 |
| Chengdu | 0 | 0 |
| Guiyang | 0 | 0 |
| Kunming | -50 | -8 |
| Xian | 0 | 0 |
| Lanzhou | 0 | 0 |
| Urumchi | 0 | 0 |
Change is on Jan 13th as compared to 6th Jan 2012
Change is per tonne
Channel
#16
| Location | CNY | USD |
| Shanghai | 0 | 0 |
| Hangzhou | 0 | 0 |
| Nanjing | 0 | 0 |
| Wuxi | 0 | 0 |
| Jinan | 0 | 0 |
| Hefei | 0 | 0 |
| Fuzhou | 0 | 0 |
| Nanchang | 0 | 0 |
| Guangzhou | 0 | 0 |
| Nanning | 0 | 0 |
| Changsha | -50 | -8 |
| Wuhan | -30 | -5 |
| Zhengzhou | -40 | -6 |
| Beijing | -30 | -5 |
| Tianjin | 0 | 0 |
| Baotou | -50 | -8 |
| Shijiazhuang | -20 | -3 |
| Taiyuan | 0 | 0 |
| Shenyang | 0 | 0 |
| Changchun | 0 | 0 |
| Harbin | -40 | -6 |
| Chongqing | 0 | 0 |
| Chengdu | 0 | 0 |
| Guiyang | 0 | 0 |
| Kunming | 0 | 0 |
| Xian | 0 | 0 |
| Lanzhou | 0 | 0 |
| Urumchi | 0 | 0 |
Change is on Jan 13th as compared to 6th Jan 2012
Change is per tonne
Beam
#25
| Location | CNY | USD |
| Shanghai | 0 | 0 |
| Hangzhou | 0 | 0 |
| Nanjing | 0 | 0 |
| Wuxi | 0 | 0 |
| Jinan | -50 | -8 |
| Hefei | 0 | 0 |
| Fuzhou | 0 | 0 |
| Nanchang | 0 | 0 |
| Guangzhou | 0 | 0 |
| Nanning | 0 | 0 |
| Changsha | -20 | -3 |
| Wuhan | -30 | -5 |
| Zhengzhou | -40 | -6 |
| Beijing | -30 | -5 |
| Tianjin | 0 | 0 |
| Baotou | -50 | -8 |
| Shijiazhuang | 0 | 0 |
| Taiyuan | 0 | 0 |
| Shenyang | -30 | -5 |
| Changchun | -20 | -3 |
| Harbin | 0 | 0 |
| Chongqing | 0 | 0 |
| Chengdu | 0 | 0 |
| Guiyang | 0 | 0 |
| Kunming | -20 | -3 |
| Xian | 0 | 0 |
| Lanzhou | 0 | 0 |
| Urumchi | 0 | 0 |
Change is on Jan 13th as compared to 6th Jan 2012
Change is per tonne
2. Flats products
HRC
5.75mm
Common
| Location | CNY | USD |
| Shanghai | 20 | 3 |
| Hangzhou | 20 | 3 |
| Nanjing | 0 | 0 |
| Wuxi | 0 | 0 |
| Jinan | 20 | 3 |
| Hefei | -30 | -5 |
| Fuzhou | 0 | 0 |
| Nanchang | 0 | 0 |
| Guangzhou | 20 | 3 |
| Nanning | -30 | -5 |
| Changsha | 0 | 0 |
| Wuhan | 0 | 0 |
| Zhengzhou | -10 | -2 |
| Beijing | 0 | 0 |
| Tianjin | 10 | 2 |
| Baotou | -20 | -3 |
| Shijiazhuang | 0 | 0 |
| Taiyuan | 0 | 0 |
| Shenyang | 40 | 6 |
| Changchun | 0 | 0 |
| Harbin | 0 | 0 |
| Chongqing | 0 | 0 |
| Chengdu | 0 | 0 |
| Guiyang | 0 | 0 |
| Kunming | -80 | -13 |
| Xian | 50 | 8 |
| Lanzhou | 0 | 0 |
| Urumchi | 0 | 0 |
Change is on Jan 13th as compared to 6th Jan 2012
Change is per tonne
Plates
20mm
Common
| Location | CNY | USD |
| Shanghai | 10 | 2 |
| Hangzhou | 10 | 2 |
| Nanjing | 20 | 3 |
| Wuxi | 0 | 0 |
| Jinan | 0 | 0 |
| Hefei | 0 | 0 |
| Fuzhou | -20 | -3 |
| Nanchang | -30 | -5 |
| Guangzhou | 0 | 0 |
| Nanning | 0 | 0 |
| Changsha | 10 | 2 |
| Wuhan | 0 | 0 |
| Zhengzhou | -20 | -3 |
| Beijing | -20 | -3 |
| Tianjin | 0 | 0 |
| Baotou | 0 | 0 |
| Shijiazhuang | -20 | -3 |
| Taiyuan | -10 | -2 |
| Shenyang | 0 | 0 |
| Changchun | 0 | 0 |
| Harbin | 0 | 0 |
| Chongqing | -100 | -16 |
| Chengdu | -40 | -6 |
| Guiyang | 0 | 0 |
| Kunming | -20 | -3 |
| Xian | 0 | 0 |
| Lanzhou | -20 | -3 |
| Urumchi | 0 | 0 |
Change is on Jan 13th as compared to 6th Jan 2012
Change is per tonne
Pig Iron
Z18-22
Foundry
