Benxi Iron & Steel (Bengang) and Hebei Iron & Steel (Hegang) two major Chinese mills to cut July prices for flat steel products in a bid to secure orders in a sluggish market. They have also promised favourable compensation policies to boost traders buying.
Hegang lowered July hot rolled coil prices by RMB 100/MT ($16/MT), cold rolled coil by RMB 150/MT and hot-dip galvanized by RMB 50/MT. It has also promised RMB 100/MT compensation for June-delivered HRC and HDG and RMB 150/MT for CRC to traders who fulfil their contracted volumes for June-July.
Bengang, on the other hand, has trimmed July CRC prices by RMB 150/MT but kept HRC prices unchanged. However, it has offered as much as RMB 250/MT in compensation for May-delivered HRC and CRC to traders who fulfil their contracted January-July volume.
Currently, spot prices of 5.5mm HRC and 1.0mm CRC at Guangzhou's Lecong steel market(biggest distributing center of steel in the country) are being traded at RMB 4,250-4,260/MT and RMB 4,680-4,700/MT respectively, both with 17% VAT. Despite steel mills correcting the prices to market levels, traders remain cautious about booking new materials as the spot market remains oversupplied.
According to the China Iron & Steel Association, China produced 1.9994 metric tonnes/day of crude steel in the first ten days of June, up 2.03% from last week of May.
Source: SBB
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