SteelOrbis Shanghai
Driven by the rising
trading volume, Chinese
billet prices are now stable after having touched bottom over the past week. Indeed, some regions have seen a slight rebound. Meanwhile,
slab prices have continued on their steady trend.
On November 22, the price of common carbon
billet in Tangshan, Hebei Province was at RMB 2,740/mt ($347), while that of 20MnSi was at RMB 2,820/mt ($359) - both up RMB 20/mt ($3) compared with the previous week. The ex-factory price of
slab from
Laiwu Steel was at RMB 2,900/mt ($369), equal to the level of the previous week.
The recent expansion in steel exports has resulted in an insufficient supply of long products to the domestic market. Therefore,
rebar prices saw a relatively big rebound while prices of
wire rod and section steel showed strong movement. Based on the current price level of semi finished steel, rolling mills can make a good profit. Thus, with bulky demand for semi finished steel and brisk commercial activity, prices have halted their downward trend and started to show stable movement.
Meanwhile, mills in South East Asia began to renew their purchases in the Chinese market, gradually accepting the quotation of $420/mt CFR from
China ( in comparison with that of $430/mt from
CIS countries). However, their purchases are in small quantities and so the
trading volume is not very big. Mills in South
Korea are still standing aside, adopting a wait-and-see stance. They are reluctant to accept the $410-420/mt CFR quotation and hope that it will drop down as far as $390/mt CFR. At present, these mills are able to maintain their
production relying on stock built up previously. Nevertheless, they are likely to resume purchases in December.
As regards
slab, the market continued in its stable trend. Due to the big price gap between
China and the
CIS,
semis from the former still look attractive to mills in South East Asia. After the Chinese central government's announcement of the new export tariff policy, Chinese mills transferred the additional costs to their customers. Right now, general quotations are at $430-440/mt CFR. Although customers are showing acceptance of these prices, the
trading volume has shrunk a little compared with the previous level.
Overall, the Chinese
semis market has shown stable movement with a balanced supply and demand relationship. With regard to finished steel, the market is in a downward trend, but it is unlikely to see any sharp drop due to low inventory. It is expected that Chinese
semis prices will continue steady at their present levels.