SteelOrbis Shanghai
The Chinese semi finished steel market saw stable movement over the past week. Common carbon
billet prices performed strongly, while 20MnSi
billet and
slab were in soft condition with a slight decline seen in some regions.
On December 13, the price of common carbon
billet in Tangshan, Hebei Province was at RMB 2,740/mt ($350/mt), while that of 20MnSi was down RMB 20/mt ($3/mt) to RMB 2,800/mt ($358/mt). Meanwhile, the ex-factory price of
slab from
Laiwu Steel was at RMB 2,850/mt ($364/mt), equal to the level of the previous week.
In recent days,
China's finished steel market moved in a steady trend on the whole, excepting the price decreases in long products and narrow strip in northern areas. The Chinese
semis market, however, continued stable in this region.
In northern
China, the local market saw a sharp decrease in
rebar with just a slight decline in 20MnSi
billet.
In comparison with the north,
billet prices maintained a strong trend in eastern and southern
China. Due to the ongoing transportation problems, northern
semis and long products were unable to flow into the southern regions, leading to an insufficient supply of
billet in these markets. As a result,
semis producers in the south enjoyed good
trading activities, and had very little stock left in their factories.
Although the Chinese government has taken measures to curb
semis exports, it seems impossible to achieve the desired results with just a 10 percent interim tariff.
Semis exports in November broke the highest monthly record of the last two years. Moreover, even with the slight increase in the quotations from the Chinese mills, there are still many inquiries from
Southeast Asia in December. This is an indication of the brisk demand in this region and its dependence on
China's semi finished steel.
In addition, since late October, the South Korean rolling mills had continued to stand aside, waiting and watching the market feedback on the new
semis tariff. As a result, they declined to make any big purchases from
China, mainly depending on their own inventory. However, sources report that these South Korean mills are now thought to have run out of
semis inventory and so are planning to make large-quantity purchases in the upcoming days - all of which is music to the ears of
China's
semis producers.
As regards
slab, the market showed a soft trend during the past week. Prices in both northeastern and northern
China saw some reduction. The leading mills in eastern
China did not lower their ex-factory prices, while the
trading volume was very low.
Generally speaking, supported by international and domestic demand,
China's
billet prices will remain stable. In spite of the weak trend at present, the
slab market is unlikely to drop sharply in the short term, because more than two HR
production lines are due to commence operations, and this will relieve the supply pressure to a certain extent.