China’s leading steelmaker-Baosteel, released its flat steel products’ list prices on 11 May ’21 for June ’21.
As per the company’s official publication, the list prices are as follows:
- HRCs surged by RMB 300/t ($47)
- Heavy plate prices increased by RMB 400/t ($62).
- CRCs spiked by RMB 650/t ($101).
- Hot-dipped galvanized moved up by RMB 350/t ($54).
These prices are of the Baoshan works based in East China’s Shanghai, Meishan mill in East China’s Jiangsu province, Qingshan plant in Central China’s Hubei province, and the Dongshan works in South China’s Guangdong province.
SteelMint’s analysis of reasons behind the surge in prices:
1.Domestic steel prices recorded an all-time high post Labour Day holidays-The Chinese steel market showed positive sentiments over increased downstream demand which, in turn, led to higher prices post-resumption of activities after the week-long Labour Day holidays. Domestic prices in China are at an all-time high, at around RMB 6,500-6,600/tonne (Eastern China).
2.Production cuts in China may suppress supply-China aims to reduce its annual steel output by at least 20 million tonnes (mn t) in 2021. But domestic steel output grew 36.6 mn t this year and another 10 mn t may be added in April. This means that over May-Dec ’21, China needs to trim at least 66 mn t of steel output to achieve its annual production reduction target. Thus, demand-supply mismatch may boost prices in the near term.
3.China’s steel consumption increases in Q1 CY ’21-The country’s domestic steel consumption jumped up by 15.3% year-on-year to 259 mn t during the first quarter of this year owing to the steady recovery in demand among end-user sectors, according to a 27th April report from the China Iron & Steel Association (CISA) on the steel industry’s Q1 performance.
Near-term outlook-
The company’s prices are expected to remain high on optimistic domestic demand and strong futures.
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