SteelOrbis Shanghai
Influenced by the reduced demand from abroad, Chinese
billet prices saw a continuous decrease recently. At the same time, however,
slab prices rose under pressure from hot-rolled coil and medium
plate.
On September 27, the price of common carbon
billet in Tangshan, Hebei Province, decreased RMB 60/mt ($8) week on week to RMB 2,800/mt ($354), that of 20MnSi decreased RMB 20/mt ($3) to RMB 2,900/mt ($367). The ex-factory price of
slab from
Laiwu Steel was up RMB 50/mt ($6) to RMB 2,950/mt ($373).
As regards
billet, sources report that the large quantities purchased in July and August by rolling mills in South
Korea are sufficient to meet their
production demand until November. Thus, inquiries from South
Korea are down significantly these days. Moreover, after the increase in Chinese
billet prices, the CFR price of
billet to South
Korea is almost the same as the CFR price of
rebar. As a result, the Korean rolling mills cannot afford such a big cost pressure and have become very cautious regarding purchases.
Meanwhile, the earlier rapid rise in the domestic steel market has curbed demand among end users to a certain extent. In recent days, prices of steel strip,
wire rod and other finished steel products declined. In this situation, if the rolling mills make purchases according to the current
billet prices, they will not be able to make any profit. Therefore, most of the market players are standing aside, causing a shrinkage in the
trading volume.
Nevertheless, the recent decline in
billet prices can be regarded as just a temporary backdown during an upward trend. Steel strip and other finished steel product prices are expected to continue increasing in the fourth quarter, which may also push up
billet prices further.
As regards
slab, prices eventually started to climb after nearly two months of stability. Some market insiders indicated that the
slab supply seems to be going up with the improvement in commercial activity. In such a situation, the increased
slab prices reflect the rising demand for
slab and for flat steel products as well. At the same time, some steel mills such as Anyang Steel, and Handan Steel will begin
production on their new rolling mills by the end of this year, thus leading to a shrunk
slab supply. It is estimated that
slab prices will move steadily up in the short term.