The market is anticipating that leading Chinese steelmakers will reduce the ex-mill prices for Aug on lessening orders for Jul and inadequate efforts in production cuts, said a report by China Securities Journal. The report learned from rumor that Baosteel will cut Aug prices for a big range of varieties with sheet/plate possibly to fall back 300-600 yuan/t. During this period, the spot steel prices are found close to the cost lines on the sluggish market; by the end of Jun, six varieties prices had even fallen below the cost, forcing steelmakers to limit their outputs.
The steel inventory thus came up to 16.329 MT by May 14, and then hovered around some 16 MT. As such, the average steel price kept falling; first week of Jul has witnessed an average of 138 yuan/t decline further. The market forecast ex-works prices for flat steels for Aug will come down. As learned from the trading houses. Last Friday, Baosteel will chop its HRC, pickled plate, CRC by some 300 yuan/t, and the heavy plate by 600 yuan/t. The steelmaker is yet to issue official file as confirmation.
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