China’s net semi-finished exports plummet in September

China’s net semi-finished exports plummet in September

This September, Chinese semi-finished export volume fell sharply while import volume slightly increased. According to the statistics from Customs, China imported 114’000 metric tons of semi-finished product in September, up 36’000 metric tons month on month. September’s imports included 13’000 metric tons of common carbon billet, down 2’500 metric tons month on month, and 58’000 metric tons of common carbon slab, up 30’000 metric tons month on month. In the other direction, China exported 138’000 metric tons of semi-finished products in September, down 239’000 metric tons from August. The 138’000 metric tons of exports included 23’000 metric tons of common carbon billet, down 46’000 metric tons from August, and 102’000 metric tons of common carbon slab, down 81’000 metric tons month on month. In September, China’s semi-finished net export volume was 24’000 metric tons, down 275’000 metric tons compared to August. The following two reasons explain the sharp fall in semi-finished export volume from August to September: 1.) Semi-finished export has met with some difficulties ever since the export rebate was canceled on May 1, 2005. Because of the export cycle, it usually takes several months before effects become noticeable in the market. 2. In Far East regions, the demand for long products is low. Moreover, output of steel mills there has decreased, leading to lower demand for Chinese billet products. The sharp decline in both semi-finished exports and finished products prices led to the fall in Chinese semi-finished prices. In late October, billet prices fell to their lowest level. In Handan, Hebei Province, the common carbon price fell to RMB 2’450/mt ($303), payment by cash, while the cash price of 20MnSi billet fell to RMB 2’480/mt ($307). Nevertheless, not many transactions were concluded at the price level. With the increase in market prices of finished products, and the suspension of production by some medium and small sized steel mills, billet prices have begun to rebound. The current common carbon billet price in Handan is RMB 2’600/mt ($322) (90 days deferred payment), while the 20MnSi billet price is RMB 2’680/mt ($332) (90 days deferred payment). Billet prices in Handan are relatively low compared to other regions. At present, the 20MnSi billet price at Tianjin Port is $345 FOB. Some traders have increased their price quotations to $355 FOB, but transactions volume has been small. Market players think that this price level will be hard to maintain due to the CIS billet price. SteelOrbis Shanghai