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China's Steel Market/Prices of HR Coils Dropped for 2 Consecutive Weeks
In the China's steel market last week (March 4 - 8), prices of each item except galvanized steel sheets dropped, and those of hot-rolled (HR) steel coils, plates and wire rods did for 2 weeks in a row. It was revealed by the China Iron & Steel Association.

According to this, HR coil prices in the last week on notional average was 4,187 CNY ($665 tax inclusive, hereinafter the same), down 63 CNY ($10) from the previous week. From two weeks before that, they dropped by 142 CNY ($23). Prices of cold-rolled steel sheets dropped by 13 CNY ($2) from the previous week to 4,880 CNY ($775). However, they exceeded the prices of the last week in January ($4,782 CNY).

Prices of galvanized sheets reversely rose. They were 5,175 CNY ($821) on national average, up 9 CNY (a little over $1) from the previous week. However, they did not reach the level of two weeks before that (5,181 CNY), and they were felt to lack the upward momentum. Those of plates dropped by 42 CNY (a little less than $7) for two weeks in a row to 4,028 CNY ($639) ditto. Other than above, prices of plates also dropped by 45 CNY ($7) to 3,801 CNY ($603) ditto.

The range of price drop in each item was modest. As the factor of price down, there are various views such as sale for taking profits but there are no factors to lead to collapse the market prices.

Its production quantity per day is said to have exceeded 2 million tons in February, and cumulative production quantity of steel products in January and February became 158,270 thousand tons, up 14.2% from the same period last year, so it is the upward tendency in production. However, as it is subtle whether there was demand to meet this and there were no factors of the market price rise, a lull in the market and slight drop can be understood.

Last week, Baoshan Iron & Steel (Baosteel) raised its domestic prices of steel products for April shipment. Such price increase was for 4 months in a row, and the company are to have shown strongly to maintain the upward tendency of the market prices. In the time when the new government has just started, the company as the steel manufacturer may not lower the market prices of steel products. Other blast furnace mills following Baosteel seem to set out their price increase in succession.

Although there is no bullish power in the steel market of China, any factor to drop cannot be found. Under the circumstances, each customer in the Asian region that is showing a stance of wait-and-see and had stopped negotiations watching the movement of this week will resume negotiations.
last modified : Fri 15 Mar, 2013 [11:30]
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