Hackneyed analysis of the debacle in steel market in China glosses over the depth of malaise. A slight reflection at the key indicators is imperative to have clarity on the developments since 2011. H1 of 2011 was the last peak achieved in the Chinese steel market.
Hard landing in the last 4 days by 3% even though most painful in the last couple of years is by no means sudden. It is culmination of persistent repression of credit lines by the state in its overdrive to rein inflation. It has led slump in buying activity in vital sectors viz., infrastructure, reality, auto and white goods.
Rubbing salt to injury US and EU economic crisis has suddenly scuttled export avenues for the Chinese mills. Moreover mills have been in production overdrive all through accumulating inventory thereby depressing levels. If about 16 million tonnes of finished steel stock was appalling equally baffling was 2 million per day of crude production in June.
Apart from that, steel inventory totaled 11.79 million tonnes in key steel mills for the first ten days of July, rising by 2.82 million tonnes YoY, an implication that earlier downside is attributed to stock shift from traders to mills.
July has been beset with, persistent rain and high temperatures. Nose dive witnessed in July has led to prices of all major products tumbling below CNY 4000 per tonne at important locations, being the lowest in last 2 years.
Expectation is rife that H2 would be reprieve after a harrowing H1 with government sponsored infrastructure and housing plans coming to pass. Moreover the global economy and demand is expected to turnaround as inventory levels are low everywhere.
The Chinese Long Product Price Index CLPPI has gone down by 250 points last week whereas the Chinese Flat Products Index CFPPI has also gone down by 170 points. The overall price index CHISPI declined by 204 points.
| Class | 20-Jul | 27-Jul | Change | % |
| CLPPI | 6816 | 6566 | -250 | -3.7% |
| CFPPI | 6220 | 6050 | -170 | -2.7% |
| CHISPI | 6478 | 6274 | -204 | -3.1% |
CLPPI - Chinese Long Product Price Index
CFPPI - Chinese Flat Product Price Index
CHISPI - Chinese Steel Price Index
Long Products
| Category | 20-Jul | 27-Jul | Change | % |
| PI-WRC | 6756 | 6521 | -235 | -3.5% |
| PI-Rebar | 6888 | 6620 | -268 | -3.9% |
PI - Product Index
Flat Products
| Category | 20-Jul | 27-Jul | Change | % |
| PI-PLTS | 5524 | 5329 | -195 | -3.5% |
| PI-HR | 6335 | 6130 | -205 | -3.2% |
| PI-CR | 6322 | 6241 | -81 | -1.3% |
| PI-GP | 6447 | 6384 | -63 | -1.0% |
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 | -200 | -31 |
| Jiangsu | -200 | -31 |
| Shandong | -140 | -22 |
| Fujian | -250 | -39 |
| Guangdong | -170 | -27 |
| Henan | -140 | -22 |
| Hebei | -180 | -28 |
| Shanxi | -150 | -23 |
| Liaoning | -150 | -23 |
| Yunnan | -90 | -14 |
Change is on July 27th as compared to 20th July 2012
Change is per tonne
WRC
6.5mm
High Speed
| Location | CNY | USD |
| Shanghai | 50 | 8 |
| Hangzhou | -110 | -17 |
| Nanjing | -140 | -22 |
| Wuxi | -100 | -16 |
| Jinan | -150 | -23 |
| Hefei | -130 | -20 |
| Fuzhou | 0 | 0 |
| Nanchang | -100 | -16 |
| Guangzhou | -190 | -30 |
| Nanning | -190 | -30 |
| Changsha | -150 | -23 |
| Wuhan | -190 | -30 |
| Zhengzhou | -90 | -14 |
| Beijing | -180 | -28 |
| Tianjin | -230 | -36 |
| Baotou | -90 | -14 |
| Shijiazhuang | -200 | -31 |
| Taiyuan | -160 | -25 |
| Shenyang | -150 | -23 |
| Changchun | -210 | -33 |
| Harbin | -240 | -38 |
| Chongqing | -100 | -16 |
| Chengdu | -120 | -19 |
| Guiyang | -120 | -19 |
| Kunming | -120 | -19 |
| Xian | -120 | -19 |
| Lanzhou | -50 | -8 |
| Urumchi | -210 | -33 |
Change is on July 27th as compared to 20th July 2012
Change is per tonne
Rebars
20mm
HRB 400
| Location | CNY | USD |
| Shanghai | -60 | -9 |
| Hangzhou | -40 | -6 |
| Nanjing | -150 | -23 |
| Wuxi | -70 | -11 |
| Jinan | -180 | -28 |
| Hefei | -130 | -20 |
| Fuzhou | -100 | -16 |
| Nanchang | -80 | -13 |
| Guangzhou | -90 | -14 |
| Nanning | -180 | -28 |
| Changsha | -130 | -20 |
| Wuhan | -190 | -30 |
| Zhengzhou | -140 | -22 |
| Beijing | -210 | -33 |
| Tianjin | -230 | -36 |
| Baotou | -200 | -31 |
| Shijiazhuang | -160 | -25 |
| Taiyuan | -260 | -41 |
| Shenyang | -150 | -23 |
| Changchun | -150 | -23 |
| Harbin | -200 | -31 |
| Chongqing | -170 | -27 |
| Chengdu | -140 | -22 |
| Guiyang | -120 | -19 |
| Kunming | -180 | -28 |
| Xian | -150 | -23 |
| Lanzhou | -120 | -19 |
| Urumchi | -210 | -33 |
Change is on July 27th as compared to 20th July 2012
Change is per tonne
Angle
#5
| Location | CNY | USD |
| Shanghai | -90 | -14 |
| Hangzhou | -120 | -19 |
| Nanjing | -100 | -16 |
| Wuxi | -130 | -20 |
| Jinan | -130 | -20 |
| Hefei | -70 | -11 |
| Fuzhou | -50 | -8 |
| Nanchang | -150 | -23 |
| Guangzhou | -130 | -20 |
| Nanning | -70 | -11 |
| Changsha | -160 | -25 |
| Wuhan | -180 | -28 |
| Zhengzhou | -160 | -25 |
| Beijing | -100 | -16 |
| Tianjin | -100 | -16 |
| Baotou | -150 | -23 |
| Shijiazhuang | -100 | -16 |
| Taiyuan | -120 | -19 |
| Shenyang | 0 | 0 |
| Changchun | -50 | -8 |
| Harbin | 0 | 0 |
| Chongqing | -50 | -8 |
| Chengdu | -100 | -16 |
| Guiyang | -100 | -16 |
| Kunming | 0 | 0 |
| Xian | 0 | 0 |
| Lanzhou | -100 | -16 |
| Urumchi | -50 | -8 |
Change is on July 27th as compared to 20th July 2012
Change is per tonne
Channel
#16
| Location | CNY | USD |
| Shanghai | -90 | -14 |
| Hangzhou | -120 | -19 |
| Nanjing | -100 | -16 |
| Wuxi | -140 | -22 |
| Jinan | -70 | -11 |
| Hefei | -90 | -14 |
| Fuzhou | -50 | -8 |
| Nanchang | -150 | -23 |
| Guangzhou | -80 | -13 |
| Nanning | -50 | -8 |
| Changsha | -170 | -27 |
| Wuhan | -150 | -23 |
| Zhengzhou | -140 | -22 |
| Beijing | -100 | -16 |
| Tianjin | -230 | -36 |
| Baotou | -150 | -23 |
| Shijiazhuang | -200 | -31 |
| Taiyuan | -120 | -19 |
| Shenyang | 0 | 0 |
| Changchun | -50 | -8 |
| Harbin | -70 | -11 |
| Chongqing | -90 | -14 |
| Chengdu | -170 | -27 |
| Guiyang | -50 | -8 |
| Kunming | 0 | 0 |
| Xian | 0 | 0 |
| Lanzhou | -150 | -23 |
| Urumchi | -50 | -8 |
Change is on July 27th as compared to 20th July 2012
Change is per tonne
Beam
#25
| Location | CNY | USD |
| Shanghai | -110 | -17 |
| Hangzhou | -120 | -19 |
| Nanjing | -60 | -9 |
| Wuxi | -130 | -20 |
| Jinan | -40 | -6 |
| Hefei | -90 | -14 |
| Fuzhou | -90 | -14 |
| Nanchang | -100 | -16 |
| Guangzhou | -80 | -13 |
| Nanning | -40 | -6 |
| Changsha | -120 | -19 |
| Wuhan | -150 | -23 |
| Zhengzhou | -150 | -23 |
| Beijing | -150 | -23 |
| Tianjin | -150 | -23 |
| Baotou | -50 | -8 |
| Shijiazhuang | -100 | -16 |
| Taiyuan | -120 | -19 |
| Shenyang | 0 | 0 |
| Changchun | -50 | -8 |
| Harbin | -40 | -6 |
| Chongqing | -50 | -8 |
| Chengdu | -130 | -20 |
| Guiyang | -100 | -16 |
| Kunming | 0 | 0 |
| Xian | 0 | 0 |
| Lanzhou | -150 | -23 |
| Urumchi | -50 | -8 |
Change is on July 27th as compared to 20th July 2012
Change is per tonne
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Source - Steel Prices China
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