According to Mr Xu Huihuang General Manager of Shanghai Yebao Materials Co Ltd that the section market has eyed a slight growth after entering May. Nowadays, the demands have been further released as the market is resuming. Many traders all believe the market is likely to postpone the upswings in near future. The section market is predicted to move up by CNY 50 per tonne to CNY 100 per tonne in mid and late May.
According to Mr Xu survey, the section market has gradually picked up since the transaction resumption post May holiday driven by the continuous price hikes in construction steel market. By now, I-beam is up CNY 50 per tonne to CNY 100 per tonne compared with that before May holiday, and channel steel and angle steel up CNY 150 per tonne to CNY 200 per tonne. The section price in Shanghai market is posted at CNY 3,400 per tonne to CNY 3,450 per tonne this week, compared with CNY 3,300 per tonne to CNY 3,250 per tonne before. So, the whole market is on the increase with slower growth rate.
Mr Xu says meanwhile, the sales revenue also presents a better performance than that before May holiday. Recently, the company''s daily sales averaged at 200 tonnes, twice than before, which indicates the down stream terminal demands have been gradually released, pushing the market to move up.
Mr Xu is confident to predict that the future market will maintain the stable trend in the middle or late May, with prices edging up by CNY 50 per tonne to CNY 100 per tonne. The price of section steel will start the correction with limited degrees, presuming that the terminal demands haven''t been further released by the end of June.
Three problems need to be focused on put forward by Mr Xu as bellows:
1. It must be clear whether the down stream demands have been really released or not.
2. The steel mills have to arrange the production as per the market demands without blind production or massive stocks.
3. The traders should maintain a clear mind in case the over replenishment would lead the market to lower again.
How to deal with the current market is becoming a big problem to the traders. It is necessary to maintain level headed in face of the rocketing price hikes. What''s more, they are suggested to carry out the reasonable inventory mix optimization even if gained the profits.