The Chinese Long Product Price Index CLPPI improved by 75 point whereas the Chinese Flat Products Index CFPPI continued improving by posting gain of whooping 113 points. The overall price index CHISPI increased by mare 96 points.

CLPPI - Chinese Long Product Price Index
CFPPI - Chinese Flat Product Price Index
CHISPI - Chinese Steel Price Index

Long Products

PI - Product Index

Flat Products

PI - Product Index

To know more about these indices please visit
http://steelprices-china.com/spi_services/spi.html

But the Chinese steel market exhibited mixed tendencies during the later part of the week, which is reflected in the movement of CLPPI and CFPPI on November 12th and November 13th 2009.

CLPPI - Chinese Long Product Price Index
CFPPI - Chinese Flat Product Price Index
CHISPI - Chinese Steel Price Index

While CFPPI reflects slowing down of increase of prices of flat products, CLPPI gives a warning for this week by reflecting weakening on weekend.

Crude steel outputs still remained at high levels in October at 51.75 million tonnes up by 42.4% YoY with exports at 2.71 million tonnes levels. As the rate in Chinese output growth continued to surpass the rate in growth of Chinese domestic demand, inventory levels remained high, thus posing a serious threat to domestic price levels.

Chinese steel price begins to rebound in October, and it is estimated that the seasonal adjustment will appear very soon due to following reasons.

1. High inventories

In general, the fact of high inventories is not changed. According to the data, the yield of crude steel over ten moths touched 470 million tonnes and the total volume of steel products were 565 million tonnes in 2008. In other words, China just needs to produce 70 million tonnes in the last two months in 2009 to surpass last year’s levels, which is likely to happen as the profit is still more than 10% and Chinese steel mills will not cut the production.

2. Negotiation of long term iron ore contract prices

This negotiation is the focus of the end of this year, which may be brought forward. As a rule, traders would increase the spot iron price and ocean freight. Therefore, the import price of iron ore and ocean freight rose since September. On the other hand, the weakened demand in winter will deter the increase of iron price.

3. Continued imbalance between supply and demand

The investment in fixed assets and real estate was less than expectation in October. Although the increase of investment increased by 33.2% in the first ten months, it reduced by 13.2% monthly, which is the largest reduction over the ten years. It is said that the investment has entered into a stable development, which may be hard to promote the steel price.

Overall, it is a period of seasonal bottom, and market players may wait to mid of January 2010 looking forward to a real increase of Chinese steel price due the Spring Festival and the busy season in spring.

1. Long products - Serpentine movements

The price movement in last 7 days signals that Chinese domestic steel market, which was on an upward really, has come to terms with demand realities as prices of long products started to weaken in the last 2 working days of the week.

On the other hand, the weekly changes, in absolute terms, reflected positive sentiments. Construction steel product price showed overall rebounds last week in China. It is learnt that 55 rebar markers and 49 wire rod producers adjusted their EXW price upward last week.

Billets
150*150
Q235

Change is on November 13th as compared to November 6th 2009
Change is per tonne

WRC
6.5mm
Common

Change is on November 13th as compared to November 6th 2009
Change is per tonne

Rebars
20mm
HRB 400

Change is on November 13th as compared to November 6th 2009
Change is per tonne

2. Flats products - Pretentious revival

Chinese price trend setter Baoshan Iron and Steel Co Ltd signaled positives by announcing December price increase of 2.5% for HR and 6.4% for CR. Wuhan Steel raised its EXW price by CNY 300 per tonne. Rizhao Steel, Anyang Steel, Laiwu Steel, Jinan Steel, Taizhou Steel and Panzhihua Steel also lifted up their EXW price.

HRC
4.75mm
Common

Change is on November 13th as compared to November 6th 2009
Change is per tonne

Plates
20mm
Common

Change is on November 13th as compared to November 6th 2009
Change is per tonne

CR
1.0mm
Common

Change is on November 13th as compared to November 6th 2009
Change is per tonne

HDG
0.5mm
Common

Change is on November 13th as compared to November 6th 2009
Change is per tonne

3. Export levels - Audacious revival

On the strength of rise in domestic levels, Chinese mills tried to increase the export levels a bit. It is learnt that the current export prices are at USD 490 per tonne FOB basis as compared to lowest heard levels of USD 480 per tonne. Kindly note that these offers are for HRC in 3 mm to 12mm in 1250/1500mm width in SS400 Grade And thinner sizes & grades have substantial extras pushing the CFR prices up.

To know more details on steel prices subscribe to services of www.steelprices-china.com by registering or send a mail to admin@steelprices-china.com with contact details. Kindly note that this is a paid service with subscription charges of USD 750 for 12 months.

(Sourced fromwww.steelprices-china.com)

The Chinese Long Product Price Index CLPPI improved by 51 point whereas the Chinese Flat Products Index CFPPI too followed suit with a gain of 43 points. The overall price index CHISPI improved by 47 points.

CLPPI - Chinese Long Product Price Index
CFPPI - Chinese Flat Product Price Index
CHISPI - Chinese Steel Price Index

Long Products

PI - Product Index

Flat Products

PI - Product Index

To know more about these indices please visit
http://steelprices-china.com/spi_services/spi.html

Chinese steel market may have a hard time in the last quarter. The environment in general is complex. Some downstream user sector, for example the auto industry is having very strong demand despite downward pressure on prices due to overcapacity and high output.

In last few days, middle and small steel mills have increased their EXW price as a sign of confidence in the changed market conditions. As a result, prices of steel products are rising.

But with winter on the anvil, demand of construction steel may decrease because of the less construction. Thus it is predicted that the upward tendency in steel prices may be arrested leading to a stable price regime.

China Daily reported that Chinese steel output may rise 10% YoY in 2009, aggravating the steel sector's oversupply problems. Chinese steel output rose 7.5% YoY to 420 million tonnes in the first nine months of the year

China Iron & Steel Association at a media briefing that crude steel output would rise by 50 million tonnes to 550 million tonnes this year., according to official data.

Mr Luo Bingsheng vice chairman of CISA said that Chinese steel production capacity would rise by 58 million tonnes this year, from 660 million tonnes in 2008.

Mr Luo said that “Oversupply problems have weighed heavily on steel prices and squeezed profit margins. This could lead to a more difficult situation in the fourth quarter and extend to the next year also.”

He admitted that “The oversupply situation will take a long time to sort out, given the fact that some steel mills are expanding capacity in the name of modernization or increasing it without necessary approval.”

CISA also reported that stockpiles of steel at 26 Chinese cities grew 5.3 million tonnes to 11.1 million tonnes in the first nine months.

According to Mr Zhang Dongyong GM of Shanghai Gaiqun Trade Ltd, "We expect that the steel market price will continue fluctuation in adjustment in near future given the soft backup for deep rally based on our observation."

He said that the behavior of the market which went up first and then down in Shanghai is largely a result of the electric trade market or financial policy changes. Common carbon HR products have rebounded at CNY 3550 per tonne from earlier CNY 3250 per tonne to CNY 3280 per tonne and then swung and slip to CNY 3450 per tonne late last week and was traded at CNY 3420 per tonne on Thursday.

He added that there are absolutely no drives for the steep rise of HR price given the bleak spot market.

Mr Zhang Dongyong said "The biggest obstacles before the spot market rise would be the booming inventory and unbridled production release. Steel mills have always balked at the moves to cut production whenever the HR market kept falling in earlier period or started rally afterwards. The inventory has got substantially increased as a result. Now the HRC stockpile in Shanghai market has amounted to 1.3 million tonnes and is expected to beat 2 million tonnes.”

He said that "Another factor responsible for future market behavior is the funds available in the market. Banks are now withdrawing the fund. The Central Bank will likely strengthen it to dampen the risk of inflation.”

Mr Zhang said HRC price will be adjusted downward amid fluctuation. After this round of correction, expectedly in the whole November there probably will be a rally to a mild extent. Both ex-works and spot prices of HRC will remain at CNY 3500 per tonne or so.

He said that "But the market is expected to get on an even keel and start picking up from next March."

1. Long products - Faint revival

Billets
150*150
Q235

Change is on November 6th as compared to October 30th 2009
Change is per tonne

WRC
6.5mm
Common

Change is on November 6th as compared to October 30th 2009
Change is per tonne

Rebars
20mm
HRB 400

Change is on November 6th as compared to October 30th 2009
Change is per tonne

2. Flats - Sea saw sentiments amidst stock piling

HRC
4.75mm
Common

Change is on November 6th as compared to October 30th 2009
Change is per tonne

Plates
20mm
Common

Change is on November 6th as compared to October 30th 2009
Change is per tonne

CR
1.0mm
Common

Change is on November 6th as compared to October 30th 2009
Change is per tonne

HDG
0.5mm
Common

Change is on November 6th as compared to October 30th 2009
Change is per tonne

3. Export levels - Price firms up by USD 20 pmt

On the strength of rise in domestic levels, Chinese mills tried to increase the export levels a bit. It is learnt that the current export prices are at USD 470 per tonne FOB basis as compared to lowest heard levels of USD 450 per tonne. Kindly note that these offers are for HRC in 3 mm to 12mm in 1250/1500mm width in SS400 grade and thinner sizes & grades have substantial extras pushing the CFR prices up.

To know more details on steel prices subscribe to services of www.steelprices-china.com by registering or send a mail to admin@steelprices-china.com with contact details. Kindly note that this is a paid service with subscription charges of USD 750 for 12 months.

(Sourced fromwww.steelprices-china.com)

The Chinese Long Product Price Index CLPPI increased by 65 point whereas the Chinese Flat Products Index CFPPI continued increasing by posting gain of 86 points. The overall price index CHISPI increased by 77 points.

CLPPI - Chinese Long Product Price Index
CFPPI - Chinese Flat Product Price Index
CHISPI - Chinese Steel Price Index

Long Products

PI - Product Index

Flat Products

PI - Product Index

To know more about these indices please visit
http://steelprices-china.com/spi_services/spi.html

The high inventories and the imbalance between supply and demand have affected market players’ confidence to Chinese steel market. But the rebound in the middle of October is given a positive impression to players, though it just remains a short time, especially the increase of HR price.

Chinese steel market situation has witnessed lot of uncertainties and ups and downs in the last two months of 2009 due to following factors

1. High level of production
According to the data of National Bureau of Statistics, total volume of plate is 231 million tonnes in the first nine months of 2009 up by 5.4%YoY. HRC and medium strip occupy 119 million tonnes up by 11.5% YoY. In other words, due to high rate of increase, the imbalance between supply and demand has surfaced clearly.

2. Increasing inventories
The first nine months inventories of HR products in main cities of China are 1.2 times than that in the early of this year, far more than other steel types.

3. Raw material price on down path
Raw materials price slightly increased in the second quarter, but it changed in the third quarter. For example, scrap steel price reduced greatly. This fall creates the condition for the reduction of steel price. In addition, the negotiation of iron ore adjusts market players’ mood. They become calm and accept the drop of iron ore price.

4. Increasing supply in international market
Because of the economic recovery, many countries resumed production, thus the steel supply in international market is increasing. According to the data of worldsteel, the volume of crude steel in 66 countries in first 9 months is 866 million tonnes down by 16.4% YoY as compared o 18.1% in first 8 months, reflecting that rate of production cut is reducing.

Moreover, other factors influencing the trend of Chinese steel market are
1. Low increase of newly gained loan effecting steel consumption
2. Likely overcapacity in winter when the consumption would go down and more steel would be added to the inventories
3. Steel export volumes would not be large enough to change the basic situation of imbalance between supply and demand in China.

1. Long products - On up trend

Billets
150*150
Q235

Change is on October 30th as compared to October 23rd 2009
Change is per tonne

WRC
6.5mm
Common

Change is on October 30th as compared to October 23rd 2009
Change is per tonne

Rebars
20mm
HRB 400

Change is on October 30th as compared to October 23rd 2009
Change is per tonne

2. Flats - Rebound continues

HRC
4.75mm
Common

Change is on October 30th as compared to October 23rd 2009
Change is per tonne

Plates
20mm
Common

Change is on October 30th as compared to October 23rd 2009
Change is per tonne

CR
1.0mm
Common

Change is on October 30th as compared to October 23rd 2009
Change is per tonne

HDG
0.5mm
Common

Change is on October 30th as compared to October 23rd 2009
Change is per tonne

To know more details on steel prices subscribe to services of www.steelprices-china.com by registering or send a mail to admin@steelprices-china.com with contact details. Kindly note that this is a paid service with subscription charges of USD 750 for 12 months.

(Sourced fromwww.steelprices-china.com)

The market sentiments got a breather after an unbroken melt down of last 75 days. It was just when death knell seemed to have besieged the market chips showed revival due to certain dormant positivity in the market.

1.Production cut on cost pressures

Chinese steel mills are facing huge cost pressures due to low realization and are making very low margins. For example, the cost of rebar production by small steel factories is around CNY 3400 per tonne and the spot prices for rebars in 20mm in HRB 335 grade was hovering around CNY 3300 in Shanghai steel market for last two weeks. In other words many steel mills had been loosing money. Theoretically speaking, these loss making steel mills should cut production to contain losses reducing availability thus creating positive price scenario.

2. Raw materials on up trend

In all likely hood iron ore material price will be stable as China is trying to find a suitable way to handle the new negotiation of iron ore and is currently buying major quantities on spot basis, which are higher than benchmark prices. The stable trend is bound to support steel prices.

3. Downstream consumption increasing

The downstream consumption refers to real estate and construction industry. The real estate development is up by 11.5%. Apparent consumption of rebars increases by 34% YoY in second quarter this year. Both of these increase the confidence of the revival of Chinese steel market.

Overall, the increasing market price, improving economic situation and traders’ regained confidence will help Chinese steel market to recover. But it remains uncertain that this recovery would be permanent as Chinese steel market is saddled with very high inventories and huge over capacity.

The Chinese Long Product Price Index CLPPI improved by 87 point whereas the Chinese Flat Products Index CFPPI showed a health growth of 103 points . The overall price index CHISPI improved by 96 points.

CLPPI - Chinese Long Product Price Index
CFPPI - Chinese Flat Product Price Index
CHISPI - Chinese Steel Price Index

Long Products

PI - Product Index

Flat Products

PI - Product Index

To know more about these indices please visit
http://steelprices-china.com/spi_services/spi.html

1. Long products - Cost pressure helps rebound

Billets
150*150
Q235

Change is on October 23rd as compared to October 16th 2009
Change is per tonne

WRC
6.5mm
Common

Change is on October 23rd as compared to October 16th 2009
Change is per tonne

Rebars
20mm
HRB 400

Change is on October 23rd as compared to October 16th 2009
Change is per tonne

2. Flats - Market hits the floor

HRC
4.75mm
Common

Change is on October 23rd as compared to October 16th 2009
Change is per tonne

Plates
20mm
Common

Change is on October 23rd as compared to October 16th 2009
Change is per tonne

CR
1.0mm
Common

Change is on October 23rd as compared to October 16th 2009
Change is per tonne

HDG
0.5mm
Common

Change is on October 23rd as compared to October 16th 2009
Change is per tonne

To know more details on steel prices subscribe to services of www.steelprices-china.com by registering or send a mail to admin@steelprices-china.com with contact details. Kindly note that this is a paid service with subscription charges of USD 750 for 12 months.

(Sourced fromwww.steelprices-china.com)