China: Baosteel cuts domestic plate material prices by RMB 100/t in Jun'22

China's Baosteel has announced on the 10 May'22 to lower the domestic prices of plate materials such as hot-rolled and pickling products by RMB 100/tonne (t) in Jun'22, for the first time this year because of demand contraction due to the Covid-19 and liquidity pressure at dealerships.

As of 1 May, the price of SS400 hot-rolled products stood at RMB 6,786/t and the price of SPHC pickling at RMB 6,633/t. Prices are inclusive of taxes.

In May, the price of Q235A 14-20mm heavy plate is RMB 5,380/t, Q345A 14- 20mm low alloy plate is RMB 5,500/t, Q245R 14-20mm boiler plate is RMB 5,480/t, Q345R 14-20mm boiler plate is RMB 5,600/t, CCSA 14-20mm marine heavy plates are sold for RMB 5,430/t.

Cold-rolled prices will be slashed by RMB 100/t. As of May 1, the price of 1mm DC01 cold-rolled steel stood at RMB 8,510/t.

Prices of hot-dip galvanised steel sheets are frozen, but electrogalvanized steel sheets are lowered by RMB 100/t. As of May 1, the price of DC51D+Z 1mm was RMB 8,754/t.

The price of aluminum-galvanised steel sheet and aluminum-zinc-magnesium coated steel sheet is reduced by RMB 100/t.

In the case of electrical steel sheets, grain-oriented electrical steel sheet prices are frozen, but prices of non-oriented electrical steel sheets are cut by RMB 100/t. As of 1 May, the B35A250 registered RMB 13,730-13,956/t and the B50A600 was assessed at RMB 8,136-8,362/t.

Also, Baosteel freezes color steel sheet prices for June deliveries. As of May 10, the prices of color steel sheet in Baosteel stood at RMB 8,250/t while the price of stone steel sheet in Baosteel was RMB 9,550/t.

Price revision by Chinese steelmakers

Another major steel mill has also reduced prices for hot-rolled, pickling and cold-rolled by RMB 200/t in June and by RMB 100/t for rebar and wire rods. Meanwhile, electric galvanised steel sheets are also cut by RMB 200/t.

The four reasons for the price cuts of some of the major Chinese steel companies, according to Shanghai Ganglian are as follows:

Firstly, the price revision reflects the current market price trend. Pre-payment and month-end payment, pricing system are considered as factors in the decline in domestic prices in April and May. Steel price cuts in June is inevitable.

Secondly, price cuts were also because of the logistical setback and consumption contraction owing to the lockdown policy. The price was lowered considering the possibility of a decrease in orders in June as steel demand decreased while the lockdown policy was implemented nationwide to prevent the spread of COVID-19.

Thirdly, price cuts are implemented to reduce the liquidity pressure of agencies. In the case of Shanghai Ganglian, there is currently too much inventory in the Chinese steel market, so the products being sold are from February to April, and there are growing concerns about the shortage of working capital for some agencies and traders.

Fourthly, there is a surplus of hot-rolled coils, due to a decrease in export orders in June and orders from the home appliance and automobile industries. However, it was found that high value-added products, such as galvanised steel sheet and grain-oriented electrical steel sheet, with rare alternatives were frozen.

According to Shanghai Ganglian, market costs fell owing to the price adjustments by major Chinese makers in June and expectations for a stable liquidity supply in the market have risen.

Note: This insight has been published in accordance with an article exchange agreement between SteelMint and SteelDaily.