Trading activity slackens in Chinese domestic semi-finished steel market

During the week ending November 15, Chinese domestic semi-finished steel prices have continued to indicate an overall rising trend, while transaction activity in the market has remained at low-to-medium levels. Average prices of steel billet and slab in the local Chinese market are presented in the following table.

During the given week, since rises in prices of iron ore and coke have pushed up production costs of semi-finished steel, steelmakers have increased their offer prices for semi-finished steel. Meanwhile, finished steel prices have also increased, providing further support for semi-finished steel prices. However, given the price rises already recorded, the finished steel market will likely face more uncertainty and risks. Rolling mills have been less willing to conclude purchases of semi-finished steel, resulting in a slackening of activity. In the past two days, ferrous metal futures prices in China have indicated significant decreases, which will weaken the support for the semi-finished steel market. It is thought that semi-finished steel prices in the Chinese market will likely edge down in the coming week.

All prices are ex-warehouse and on actual weight basis and include 17 percent VAT.
 
$1 = RMB 6.85