After HRC and CRC, China’s export offers for plates plunged by USD 10/MT against previous week.
Current offers for commercial-grade plates from China are being assessed at USD 370-375/MT, FoB basis.
This fall in export offers is in line with the plunge in China’s domestic plate prices. Currently, commercial grade 14-20mm plates are being traded at RMB 2,550-2,580/MT (USD 391-396/MT) (ex-Shanghai excluding excise).
Steel prices in China have been rising since last two months. In Apr’16, Chinese plates export offers reached as high as USD 480-490/MT, FoB China. However, with the start of May’16, the price rally stopped and downtrend started in country’s domestic flat products market.
Reason Behind Price Plunge
In order to boost economic growth and demand, Chinese government had announced stimulus packages in the start of year 2016. While on supply side, country vowed to cut its production capacity by 100-150 MnT over next five years.
However as per the latest data released by the government, China’s crude steel output in Apr’16 was 69.42 MnT up by 0.5% Y-o-Y basis and in Mar’16, it was record high at 70.65 MnT.
With the surge in China’s domestic steel prices, zombie enterprises returned to the market in order to profit from higher prices resulting in high crude steel production.
No significant improvement in demand coupled with massive overcapacity in country’s steel industry led to fall in steel prices once again.
Indian Plates Offers
Indian plates prices are currently assessed at INR 31,500/MT (ex-works excluding excise). While plates offers in Mumbai and Delhi is assessed in the range of INR34,000-34,500/MT (including excise of 12.5%).
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