It is reported that the domestic steel prices have entered an upward passage and shown vigorous increase in the past week amid which some trading houses held tight the resource and felt reluctant to sell. Currently, the demand appears good though some of the transactions are concluded between the traders and real consumption from the end users isn't fixed.

 

The producers largely hiked ex w prices pushed by steely cost the previous week, leading to follow suit by the market prices in the main regions. The price was led by flat products, mainly HRC, medium plate and CRC. Construction steel market also sees stronger anticipation for upturn given releasing demand some producers raised ex-w price and drove up market price accordingly. For sections, its price also moved up and transactions turned better pulled by other varieties upward trend.

 

Construction steel market was repressed in the previous period. On March 11th 2010 about 34 producers added CNY 30 per tonne to CNY 50 per tonne to their ex factory price. The price gain in the East, North, South and central South of China presented to exceed CNY 100 per tonne. In the meanwhile, bettering export and strong anticipation of April price hike by the leading steelmakers are the main driving forces behind the rising sheet/plate prices. Some traders' withholding attitude even intensifies the upbeat atmosphere. Medium plate, after a year of soft operation, moved in the upside given lower capacity utilization and improving demand.

 

The analysts think the main steel products would enter across-the-board rising path, thanks to steelmakers' price push which actually covers the high stock and adverse effects from policy adjustment. In the traditional busy season of March and April steel prices are believed to continue upsurge.

 

A researcher with Jinshi Futures suggested in a report carried on Securities Times that the current steel price is partly supported by lessening supply for the moment which is a result of cut in steelmakers' delivery to the trading houses. The steelmakers mull to lift ex-w price later and by reducing orders, they hope to ease up social stock pressure. Once the price enters upward course, end users would become more active in buying and in turn scale down inventory. But as such the real inventory turnaround is delayed and it possible high stockpiles would not come down until early April rather than in middle of March as usual.

 

The researcher warned future price rise remains under pressure.

 

Sourced from MySteel.net