SteelOrbis Shanghai
According to the latest figures released by Chinese customs, Chinese semi finished steel exports totaled 1.07 million mt in September, merely 60,000 mt down compared with August, while they were up a huge 675 percent year on year. Meanwhile, Chinese imports in September totaled approximately 30,000 mt, resulting in 1.04 million mt net exports for the month.
From January to September inclusive, cumulative semi finished steel exports increased 2.4 percent year on year to 6.13 million mt; meanwhile, cumulative imports reached 320,000 mt, down 70.9 percent. Thus, total net exports of semi finished steel for the period in question came to 5.81 million mt.
The strong semi finished steel export trend in September was one of the major factors that caused domestic semi finished steel prices to move steadily up.
The Chinese steel market performance was quite feeble in week 42. Common carbon
billet remained stable, with a slight decline in 20MnSi
billet prices, while the
slab market still maintained its steady trend.
On October 18, the price of common carbon
billet in Tangshan, Hebei Province, remained stable at RMB 2,830/mt ($358), while that of 20MnSi decreased RMB 30/mt ($4) to RMB 2,870/mt ($367). The ex-factory price of
slab from
Laiwu Steel remained unchanged at RMB 2,950/mt ($373).
The
billet market in Tangshan became gradually weak in week 41. At the beginning of week 42, local
semis producers still had some confidence in the future and so quotations were quite resolute. Quotations of common carbon
billet from some mills were even above RMB 2,860/mt ($362), RMB 30/mt ($4) higher than the mainstream prices. However, with the price slip in
wire rod, steel strip, welded
pipe and other finished steel products,
billet began to see bearish commercial activity. As a result, the mills had to lower ex-factory prices.
Influenced by the continuous decrease in
rebar prices, steel mills in eastern
China reduced purchases of 20MnSi
billet. In the middle of week 41, the steel mills lowered ex-factory prices by a big margin, but this failed to boost up the
trading volume.
With the continuous decline in finished steel prices, rolling mills in Jiangsu Province are especially cautious about
semis purchases, leading to shrinkage in the sales of local
semis producers. Nevertheless, due to pressure costs,
semis producers declined to lower their ex-factory prices.
Supported by exports, the
slab market maintained its stable trend. At present, the export quotation of
slab from the Liaoning region is at $380-385/mt FOB, that from Hebei is at $ 385-390/mt FOB, while that from Shandong is at $390-400/mt FOB. The strong demand from South
Korea is contributing greatly to the brisk commercial activity in the
slab market. Meanwhile, various mills have strengthened their efforts in research and marketing so as to improve returns. Right now, many of them have won the recognition of the international market, which means that a brilliant future lies ahead for exports.
Furthermore, in spite of the recent decline, Chinese hot rolled sheet and medium
plate prices are still at a high level. Thus, rolling mills are able to make good profits according to the current
slab prices. However, since the demand on the whole is not bulk,
slab prices are unlikely to see much increase.
All in all, the Chinese
billet market may go down in the short term because of the great market pressure, while
slab may remain stable buoyed by the support of the international market.