SteelOrbis Shanghai
Affected by the weak trend in both international and domestic markets, Chinese
slab prices saw a slight decline over the past week, while a flat performance was observed in
billet trading.
On November 29, the price of common carbon
billet in Tangshan, Hebei Province was at RMB 2,740/mt ($350), while that of 20MnSi was at RMB 2,820/mt ($360) - both equal to their levels of the previous week. Meanwhile, the ex-factory price of
slab from
Laiwu Steel was down RMB 30/mt ($4) to RMB 2,870/mt ($367).
Due to the continuous decrease of flat rolled prices in the European and American markets,
slab prices moved down the in international market. The falling export quotations from the
CIS and South American regions also affected Chinese
slab exports.
In the domestic market, flat rolled prices are at a low level in the northern regions. With sales currently sluggish, the local mills are being quite cautious about
slab purchases. The mills also think that
slab prices may go down in the future and fear they may incur losses if they make purchases in large quantities. On the other hand, although the leading mills in the south have kept their flat rolled prices stable, the prices of the medium-sized mills have already declined a little.
According to some insiders with the
slab producers, due to the reduced product shipments and low level of inquiries, they have to lower their ex-factory prices.
Compared with the
slab market,
billet saw a flat market performance throughout the past week. Since the long products market walks has long been stable, the rolling mills have gradually increased their purchase quantities. As a result,
semis producers do not have much inventory pressure. Meanwhile, one
semis producer located in Henan Province has just commenced operations on a narrow strip
production line. Thus, it has reduced its quantities for sales, relieving the local market pressure.
In addition, rolling mills in South East Asia are largely dependent on the Chinese
billet supply. Recently, inquiries from this region rose considerably. At present, the export quotation of Q235
billet to South East Asia is at $430/mt CFR, while the deal prices of Q235
billet to
Philippines and
Thailand for December shipment are at $425/mt CFR. Based on this price level, the profits to be made in exports are still above those possible in the domestic market.
All in all, the Chinese
semis market was in a weak and steady state throughout last week, and looks likely to continue this trend in the short run.