Chinese traders expect strong billet export in second half year

SteelOrbis Shanghai According to the latest figures released by the Chinese Customs, China's semis exports reached 830,000 mt in July, down 20 percent month on month. However, the figure is still at a high level. Furthermore, the low prices are quite attractive for foreign customers. Therefore, the traders are confident about strong semis exports from China for the next half year. After experiencing the sharp decrease in week 31, Chinese slab prices stopped the downward trend temporarily in week 32. The mills retained their quotations at the level of the previous week, but due to bearish commercial activity, it is difficult for them to maintain the level for a longer time. Some mills sold a portion of their inventories at RMB 2,750-2,800/mt ($345-351), influencing the market by a certain extent. At present, the slab market is not in a stable trend, so it may still see a slight decline in the short term. Compared with the slabs, the conditions are better for billets; especially for common carbon billets. The brisk demand for wire rod, round bar and narrow strip boosted the demand for common carbon billets, resulting in the price rise. However, since the rebar market is stable at a low price level, rolling mills cannot make a big profit, leading to the sluggish demand for 20MnSi billet. Therefore, there is almost no gap between the prices of these two kinds of billets. Normally, the price difference should be about RMB 100/mt ($13). In such a background, the semis producers are still very cautious towards their sales. Being afraid of losing customers, they do not dare to give out high quotations. Overall, since August is the off-season regarding the demand for steel products, the semis prices are not likely to see a rapid increase. It is estimated that the billet prices will continue fluctuating slightly, while the movement of slabs may only be downwards.