Chinas net semi-finished exports plummet in September
This September, Chinese semi-finished export volume fell sharply while import volume slightly increased.
According to the statistics from Customs,
China imported 114000 metric tons of semi-finished product in September, up 36000 metric tons month on month. Septembers imports included 13000 metric tons of common carbon
billet, down 2500 metric tons month on month, and 58000 metric tons of common carbon
slab, up 30000 metric tons month on month.
In the other direction,
China exported 138000 metric tons of semi-finished products in September, down 239000 metric tons from August. The 138000 metric tons of exports included 23000 metric tons of common carbon
billet, down 46000 metric tons from August, and 102000 metric tons of common carbon
slab, down 81000 metric tons month on month.
In September,
Chinas semi-finished net export volume was 24000 metric tons, down 275000 metric tons compared to August. The following two reasons explain the sharp fall in semi-finished export volume from August to September:
1.) Semi-finished export has met with some difficulties ever since the export rebate was canceled on May 1, 2005. Because of the export cycle, it usually takes several months before effects become noticeable in the market.
2. In
Far East regions, the demand for long products is low. Moreover, output of steel mills there has decreased, leading to lower demand for Chinese
billet products.
The sharp decline in both semi-finished exports and finished products prices led to the fall in Chinese semi-finished prices. In late October,
billet prices fell to their lowest level. In Handan, Hebei Province, the common carbon price fell to RMB 2450/mt ($303), payment by cash, while the cash price of 20MnSi
billet fell to RMB 2480/mt ($307). Nevertheless, not many transactions were concluded at the price level.
With the increase in market prices of finished products, and the suspension of
production by some medium and small sized steel mills,
billet prices have begun to rebound. The current common carbon
billet price in Handan is RMB 2600/mt ($322) (90 days deferred payment), while the 20MnSi
billet price is RMB 2680/mt ($332) (90 days deferred payment).
Billet prices in Handan are relatively low compared to other regions.
At present, the 20MnSi
billet price at Tianjin Port is $345 FOB. Some traders have increased their price quotations to $355 FOB, but transactions volume has been small. Market players think that this price level will be hard to maintain due to the
CIS billet price.
SteelOrbis Shanghai