Trading activity for Chinese plate exports picked up slightly in the past week after producers agreed to sell at slightly lower prices.
Fastmarkets’ price assessment for September shipments of steel heavy plate export, fob China main port was $485-490 per tonne for the week ended Tuesday July 21, narrowing downward by $5 per tonne from $485-495 per tonne a week earlier.
A Zhejiang-based trader told Fastmarkets that a mill in northern China had sold small quantities of plate to South America last week at $490 per tonne fob. These were mostly bound for Chile.
“One week prior, the mill’s lowest acceptable price was $490-495 per tonne fob, weighted toward the upper end,” the trader said.
“Thanks to the slightly lower prices, we Chinese sellers managed to secure some deals last week, which is progress considering the quiet market in the preceding week,” he said.
The trader suggested that the mill might have been willing to concede to lower prices because it needed to offload some 10,000 tonnes of cargoes earmarked for export this month.
“But I don’t think Chinese mills will lower their export prices significantly in the short term, because they are still enjoying steady demand in the domestic market where prices are high,” he said.
A transaction price of $490 per tonne fob China is equivalent to about $520 per tonne cfr South America, a source based in South America said.
A Japanese mill is offering its product at $525 per tonne cfr South America to compete with Chinese products, the source said. But he has yet to hear of any transactions.
In comparison, Southeast Asia, another major destination for Chinese plate, was quiet over the past week.
The Zhejiang-based trader said he received a bid from the region at $475 per tonne cfr China, but he could not find suppliers that were willing to sell at this price.
He believes transactions are possible if Southeast Asian buyers are willing to bid as high as $480-485 per tonne cfr China.
China’s domestic plate market***
Meanwhile, China’s domestic plate market strengthened further during the week.
Fastmarkets’ weekly price assessment for steel plate domestic, delivered whs eastern China was 3,910-3,920 yuan ($560-561) per tonne last Friday, up by 10-30 yuan per tonne from 3,880-3,910 yuan per tonne the week prior.
The increases are due to steel demand being bolstered by China’s continual economic recovery, a Shanghai-based steel analyst said.
China’s GDP growth***
China’s gross domestic product grew by 3.2% year on year in the second quarter, compared with a 6.8% contraction in the first quarter, according to the country’s National Bureau of Statistics.
The GDP growth was led by the industrial sector, particularly machinery and construction, the analyst said.
China’s value-added industrial output rose by 4.4% on the year in the second quarter, with factories stepping up production amid government measures to contain the spread of Covid-19, the bureau said.
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