Hot-Rolled Coil Price of Ansteel within Expectation, Mills Still on Sidelines

SHANGHAI, Mar. 19 (SMM) – Ansteel announced its hot-rolled coil price for April on Monday which was down RMB 300/mt to RMB 3,580/mt (ex-works, tax excluded), and transporting subsidy was up RMB 50/mt, with cost for goods shipped to Shanghai at RMB 4,000/mt. However, no rebates for prices in March were reported by the mill. Shougang, which released its prices last Friday offered no subsidy for transportation, but promised to introduce settlement prices later. Thus, steel mills were still holding a wait-and-see attitude.

Several factors have caused mills to lower prices. First, traded prices in the market fell sharply in March by RMB 300-400/mt, much lower than prices offered by steel mills, leaving severe losses for buyers with long-term contracts. Second, disappointing orders for steel mills promoted them to cut prices. Third, the falling prices of iron ore lowered cost for steel mills and left downward room for ex-works prices.

In general, most steel mills still watched on the sidelines, and were not clear to price trends. In this context, mills opt to lower prices to certain extent but will unlikely make up all the previous losses of traders, so as to minimize the risk.