Export prices for Chinese steel plate have risen to their highest since September 2011 amid investors’ concerns over inflation coupled with a recovery in demand.
Fastmarkets’ price assessment for April/May shipments of steel heavy plate export, fob China main port was $685-695 per tonne for the week ended Tuesday March 2, widening upward by $5 per tonne from $685-690 per tonne fob a week earlier.
The most-traded May HRC futures contract closed at 4,907 yuan per tonne on Tuesday, up by 66 yuan per tonne from Monday. The contract rose above 5,000 yuan per tonne on Wednesday morning.
“Only by acquiring assets can investors offset losses triggered by inflation, and commodities are among the best,” a Tianjin-based trader said.
A Zhejiang-based trader said that his customers in South America and Southeast Asia were willing to pay up to $690-695 per tonne fob in the past week, having realized that prices were unlikely to soften in the next few weeks.
Northern China’s Baotou Iron & Steel sold small quantities of plate at around $685 per tonne fob last week, after which the mill suspended trading in anticipation of a further strengthening of the market, sources said.
A source at Minmetals Yingkou Medium Plate Co said that it was offering its product at $700 per tonne fob this week. Eastern China’s Shagang Group is also asking for the same price, a source there said.
Shandong Iron & Steel is offering cargoes at $730 per tonne fob because it is taking into account a possible reduction in the export tax rebate for steel products.
Word had been circulating in the Chinese market for weeks that the government might reduce the rebate to 9% from the current 13%.
Fastmarkets’ weekly price assessment for steel plate domestic, delivered whs eastern China was 4,890-4,930 yuan ($756-762) per tonne last Friday, up by 230 yuan per tonne from 4,660-4,700 yuan per tonne a week earlier.
A Shanghai-based trader said on Tuesday that many downstream buyers had resumed work after the Chinese New Year holiday in February. This has resulted in a steady stream of orders, which he expects to bolster prices in the next few weeks.
“The demand recovery has kept people optimistic. News about steel production cuts in Tangshan has added coal to the fire,” the Shanghai-based trader said.
This development sparked price increases in the domestic steel market on Wednesday morning. The source at Yingkou said that the mill suspended its exports amid the price surge with the aim of raising its offers in the next few days.
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