SHANGHAI, Jun. 26 (SMM) – As some steel mills raised ex-works prices of hot-rolled coil for July, leaving prices for goods delivered to some markets RMB 200/mt higher than market prices, traders said they will determine July’s orders depending on rebates offered by steel mills for June.
Anshan Iron & Steel announced to offer a RMB 90/mt rebate for traders in east and north China and a RMB 70/mt rebate for traders in south China. Thus, prices for hot-rolled coils arriving in east China were RMB 3,550-3,580/mt, while prices for goods to Lecong were RMB 3,620/mt. In June, market prices were RMB 3,400-3,450/mt in east China and RMB 3,550-3,600/mt, still well below traders’ purchasing prices.
Oversupply pressure in hot-rolled coil markets was eased slightly as reduction of hot-rolled coil production at steel mills outstripped other categories. Besides, mills made noticeable adjustment to settlement prices for May, which left limited room for further prices in June. On the downstream market side, orders in manufacturing sector continued to weaken in July, but downstream buyers may increase hot-rolled coil purchases in preparation for the improving sales expected in September. Thus, steel mills did not offer higher rebates for June, hoping the replenishments in August may lend some support to prices after they manage to get through July.