SteelOrbis Shanghai
The most important factor preventing a drop in domestic semi-finished steel prices of
China seems the strong international market.
Currently, the semi-finished steel supplies from the
CIS countries are able to meet the demand from
Middle East and
Europe, but the amount of supplies from the
CIS to other regions such as
Southeast Asia is little. Chinese export prices for billets are higher than
CIS prices due to high domestic
semis prices, which hampers the exports. The export volume may pick up when domestic prices decrease to a certain degree. The proximity to other Southeast Asian countries is an advantage for
China in terms of
billet exports; nevertheless, an increase in
Russia's
billet exports to
Southeast Asia from its eastern ports may threat Chinese
billet exports.
Although the severe conditions of winter are over, international semi-finished steel prices are continuing to increase thanks to the reviving demand. Meanwhile, overall steel prices in Chinese domestic markets have began to fall slightly, which has suppressed rolling mills' activity in placing
billet and
slab orders. Chinese mills consume common carbon billets for rolling
wire rod and low alloy billets for rolling rebars in general. Common carbon
billet prices and the transaction volume slightly went down compared with the previous week. Low alloy
billet prices remain strong as the mills have increased their
rebar rolling activities. Last week,
slab prices remained unchanged too.
At the beginning of last week,
semis prices kept climbing in Tangshan region –the major market of North
China- and Jinxi Steel raised the ex-factory prices of common carbon billets to RMB 2,800/mt ($349). As the increase in finished steel prices ceased, most rolling mills have cut their follow-up orders in the latter part of the week and are now waiting to see what is going to happen next. The prevailing market prices went back to the level of a week ago. In Northeast
China, prices increased and reached to the levels in North
China.
Semi-finished steel prices are currently stable in local markets but they are expected to decline slightly in the short run.