SHANGHAI, Apr. 5 (SMM) – Most of steel mills have released their hot-rolled coil prices for April, but Steelease has confirmed that mills’ saw limited orders for April. Steel mills announced to offer rebates to traders, but on the condition that traders have completed orders set out in contracts for the first four months. Meanwhile, mills started report poor orders in February, meaning that traders are unlikely to fulfill the agreed purchasing volume to obtain rebates.

Steel traders were only able to fulfill some 60-70% of the contracted volume given the long-term contracts and rebates offered by mills. Prices of Shagang after the rebates is around RMB 3,950/mt, while price for goods of Liuzhou I/S to Lecong is RMB 3,900/mt, which are close to the current market price. Price for spot trades of Rizhao I/S is as low as RMB 3,820/mt, which is regarded as a prelude to price war among steel mills.

In addition, the unsold orders may be offered through their companies conducting spot transactions. Ansteel and Benxi I/S decided to sell these goods through auctions or biddings, with bidding prices for goods delivered to Shanghai and Lecong at RMB 3,900/mt. Spot goods of Rizhao I/S were traded at RMB 3,800/mt in Shanghai. About 15-20% of the resources planned to be sold was sold through spot trade, indicating that the position of long-term contracts as a major trading pattern for steel mills is weakened.