SHANGHAI, Apr. 18 (SMM) - Early this week, concentrate prices in Tangshan were keeping stable, but moved lower in response to tumbling commodity prices as the week approached. Steel mills, on the other said, slowed purchases, and cut prices by RMB 10-20/mt. Currently, prices for 66% concentrates were RMB 1,100/mt in Qian’an, down RMB 5/mt. Steelease expects domestic concentrate prices to keep falling in the coming week for the following three reasons:
First, mild gains in concentrate prices in early week were due largely to stocks replenishment by some steel mills. Most steel mills continue to keep a tight control over inventories. Amid the sluggish environment, steel mills will reduce the procurement prices after completing stock replenishment.
Second, the data released by China Iron and Steel Association shows that daily crude steel output continued to grow during the first ten days of April, up to 2.12 million mt from 2.07 million mt in the last ten days of March. On the other said, steel inventories in trading markets are being slowly consumed. As of April 12, rebar inventories were 492,000 mt, merely down 7,000 mt from the last ten days of March, while hot-rolled stocks grew rather, up 57,000 mt from the last ten days of March.
Third, sluggish demand in Tangshan, coupled with suppliers’ unwillingness to move goods, has added to inventories of 20-30 days at mine operators. Besides, increasing operating rates at beneficiation plants will also intensify oversupply pressures.