After Hebei Steel raised WRC and rebar prices last weekend, steel mills including Shangang and San Gang Min Guang also announced price hike for March yesterday. This means steel mills’ price hike in March have arrived.
Last weekend, Heibei Steel released pricing policy for March, raising both WRC and rebar prices by CNY 100 per tonne. Similarly Shangang rebar price for early March has been raised by CNY 50 per tonne to CNY 200 per tonne. And San Gang Min Guang also see price rise by CNY 30 per tonne to CNY 120 per tonne.
According to statistics, there are in total 28 WRC and rebar producers adjusted their EXW prices last week. 9 of them unchanged the price while 19 raise price slightly.
As to the reasons for the price hike, insiders said on one hand it is a practice for WRC and rebar prices increasing after the Chinese New Year, on the other hand with ore, coal and other raw material prices rose again recently, steel mills are transferring the cost pressures by prices hike.
However whether the market demands are able to keep up with the price hike remains to be seen. Statistics show that in the first week after the Chinese New Year, spot average daily trading volume of steel was only about 30% of the normal level because majority of the downstream site has not yet started. That is to say, it is the high costs and positive expectation of future market demand that support the steel prices now.