China ship plate price faces upward pressure in short term

Ship plate prices in China are facing upward pressure in the short term, mainly due to recovering demand and decreasing output, said market watchers. China's largest steel maker Baosteel previously announced that it would keep its February ex-factory ship plates priced at 4,000 yuan/metric ton (tonne), not including taxes.
The announcement surprised the market which was expecting the steel maker to raise ship plate prices by 200 yuan/tonne.
Baosteel's decision to hold the price fixed will likely lead others to do the same.
However, price stability will probably be disrupted within the month by climbing prices, market observers said.
The demand for ship plates has strongly recovered as of late. Many large shipbuilders began procuring in mid-January the steel they need for the first half or even the entire year. Major shipbuilders including the China State Shipbuilding Corporation and China Shipbuilding Industry Corporation have been actively negotiating ship plate prices with Baosteel and Ansteel in search of suitable prices.
Besides, since Q4 last year, the dry bulk shipping market has thrived and freight rates have come to a high level, thanks to the soaring transportation of iron ore, coal, and steel. Ship owners have also begun to urge shipyards to deliver dry bulk boats. The operation of midsize and small shipbuilders improved as a result.
Steel plate output has meanwhile fallen short of expectations due to several accidents. Xinyu Iron and Steel Company, located in south China's Zhejiang province, halted its production of steel plates due to an equipment failure. Two of the Wuhan Iron and Steel Group's high temperature furnaces did not run smoothly due to local power rationing. As a result, the group will likely postpone the delivery of an estimated 100,000 tonnes of steel due from January to February.
Other factors including rising costs faced by steel makers, increasing new orders of Chinese ship builders and price hikes of other steel types, will also help boost ship plate prices.