China’s leading steelmaker-Baosteel has released its flat steel product list prices today for Apr ’21.
As per the company’s official publication, the list prices for:
- HRC and heavy plates- increased by RMB 300/t ($46)
- CRC-raised by RMB 100/t ($15)
- Hot Dipped Galvanized products remains unchanged
These prices are of the Baoshan works in East China’s Shanghai, Meishan mill in East China’s Jiangsu, Qingshan plant in Central China’s Hubei and the Dongshan works in South China’s Guangdong province.
SteelMint’s analysis on the reasons behind surge in prices:
1.Soaring steel prices-Chinese flat steel prices were largely stable in the first half of February. Market activity however dwindled before the Lunar New Year holiday. After the market returned on February 18, prices jumped. Export and domestic HRC prices in Eastern China rose m-o-m by 2.9% and 2.8% respectively. Possible export rebate cuts and strong futures resulted in an increase of HRC prices.
2.High offers and freight costs nudge China’s export prices higher-Export prices for Chinese cold-rolled coil and hot-dipped galvanized coil edged up on high offers from steel mills and higher freight rates in the past week, with costly freight inhibiting trading activity. High freight rates continue to make transactions difficult. Furthermore, plunge in steel prices also dampened buying sentiment.
3.Robust demand-Underlying demand in China remains strong and a decline in flat steel stocks at producers immediately after the holiday suggested that distributors were in need of material, which pushed prices higher. The issue of export rebates remains a major uncertainty for the Chinese export market. Many market participants expect rebates to be cut to 8-9% from the current 13%, which should result in higher export prices and in turn could open more possibilities for competing suppliers in the seaborne market.
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