SHANGHAI, Apr. 10 (SMM) – As hot-rolled coil prices fell noticeably, some downstream buyers opted to purchase from traders and some traders also cut procurement from mills. Thus, the proportion of orders to output at steel mills was basically around 70% in March and April.
Steelease confirmed that some mills introduced new trading patterns for making up the gap in orders. One mill in central China is seeking to negotiate with a large steel trader for making transactions at the spot prices 15 days after goods arrived. Besides, the mill will offer certain discounts to the trader. Deals made by such pattern are often of large amount, with some exceeding 100,000 mt. Furthermore, some traders and mills in north China are also considering new patterns for trading.
Thus, steel mills have developed various measures for depleting inventories. The mode of using spot prices as settlement prices was only adopted by several mills, including Jianlong Group, last year.