Plate is expected to usher in reversal opportunity in April
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In the aftermath of the 2013 Spring Festival, the plate market experienced a period of fluctuation. According to data from the Lange Steel Information Research Center, as of March 28, the average price of 20mm medium plate in major domestic cities stood at 3,860 yuan per ton. This marked a slight decline of 5 yuan from the previous month’s end. The price of 20mm plate in Handan (represented by Handan Iron and Steel) was 3,680 yuan, down around 120 yuan compared to the end of February. Meanwhile, in Shanghai (represented by Maanshan Iron & Steel), the price was 4,000 yuan, down 70 yuan from the end of February. As shown in the chart below, after a prolonged downward trend in late February and early March, the market entered a consolidation phase with weaker fluctuations starting in mid-March.
Over the past six years, the plate price has reflected the broader challenges within the steel industry. From 2007 to mid-2008, the market saw a historic rebound, with prices rising from nearly 4,000 yuan to as high as 6,300 yuan. However, this period of growth was short-lived, as prices plummeted quickly. By the second half of April 2008, plate prices had fallen to a five-year low. For the next four years, prices remained largely below 5,000 yuan. Looking at the historical trends in March and April over six consecutive years, four of those periods saw continued price increases, while two ended in a bottoming-out phase in early April. Based on this pattern, the likelihood of a market rebound in April 2013 appears higher than usual. Additionally, considering the price levels of medium and heavy plates over the past six years, the current prices in March and April are only slightly above those seen during the 2009 economic crisis. Given that the current domestic economic situation is significantly better than in 2009, the market's bottom support is now stronger. Therefore, based on the recent market price movements over the past three to four months, it is expected that plate prices will reach their lowest point in early April 2013.
At the start of 2013, weak demand from downstream industries affected the overall performance of the plate market. Construction machinery sales were notably lower, with excavators selling just 11,058 units in January and February—down 46% year-on-year. Loader sales reached 16,874 units, a 32% drop, while bulldozer sales fell by 48%. These figures suggest that construction equipment sales are likely to continue declining in March and April.
The shipbuilding industry showed some improvement in February 2013, with global new ship orders reaching 1.944 million CGT, a slight increase from the previous quarter. China maintained its leading position in ship orders, with 18,273,344 CGT in hand, while South Korea reported 777,283.1 CGT. However, Chinese shipbuilding output for January and February declined by 20.9% year-on-year, and the number of handheld orders dropped by 27.4% year-on-year. Despite a small increase in new orders, the overall performance of the industry remained challenging, with production and operations becoming more difficult.
Domestic plate inventories were high at the beginning of the year, but stock levels began to slow down, reducing supply pressure. According to incomplete statistics from Lange Steel, as of March 22, total plate stocks in 29 key cities reached 1.668 million tons—an increase of 2.43% month-on-month and 29.82% year-on-year. Although market demand started to pick up slowly in March, steel mills maintained normal shipping schedules without large-scale production cuts or maintenance, resulting in a gradual reduction in social inventories. However, traders' willingness to lock in orders decreased, which slowed inventory consumption.
In addition, ex-factory prices from domestic plate producers have been falling, weakening cost support for market prices. While Shougang and Baotou Steel maintained stable pricing, Anshan Iron and Steel and Hegang saw significant declines. Among second-tier steel mills, Puyang, Wenfeng, Xicheng, and Handan Iron and Steel all experienced sharp price drops. Even with lower prices at Puyang Steel Works, there was no notable increase in orders. All signs indicate that the plate market still faces limited downside potential in the short term.
Based on the analysis of these factors, the supply and demand imbalance remains, and the market is expected to maintain inventory levels in the coming weeks before demand begins to recover. With improved price support and better liquidity, the plate market is likely to see a reversal opportunity in the second half of April.