SteelOrbis Shanghai
Overall decline in long steel prices also suppressed
billet prices in
China. Meanwhile,
slab prices are more stable thanks to previously stronger
flats market.
China's macro-economic measures, the end of
construction season, unfavorable conditions in neighboring countries are all among the reasons for bad mood in the market.
As the
construction season has come to an end in
China, the
billet purchases of
rebar rollers have slowed down. The
billet market in
Thailand and Vietnam, which are among the largest
billet importers from
China, is not good either for the same reason. Steel mills in Tangshan are currently offering their 120 mm x 120 mm common carbon billets at around 2,990 RMB/mt ($374) FOB. Meanwhile, the recently announced macro-economic measures have increased Chinese
billet makers' and traders' need for urgent cash. Therefore, especially small scale mills and traders nowadays prefer to sell their products in domestic market with cash payments instead of exporting.
Nevertheless, because the domestic market is not brisk either, the local market prices of Chinese billets decreased around RMB 50-80/mt ($6-10) week on week. 120 mm x 120 mm common carbon billets are currently being sold at around RMB 2,800/mt ($350) in Tangshan market. The prices in the domestic market were stable in the previous week. However,
billet prices in northern region began declining from the beginning of last week. With the recent overall decline in strip steel, section steel and
wire rod prices in northern regions, the demand for billets is decreasing. Most of the market players are waiting to see what will happen next. The
semis producers also lowered the ex-factory prices because of the difficulties in sales.
The price decrease of long products in eastern
China has directly influenced the
billet demand of the rolling mills in that region. With a strong “wait-and-see” attitude, and high
billet inventory, the rolling mills have basically stopped the purchases last week.
On the other hand, slabs still maintain their strong level at around RMB 3,400-3,500/mt ($426-428) for Q235.
Overall, it is difficult for
billet market to recover from the downward trend in the short term, but
slab price will remain stable.