Chinese billet prices keep on rising

SteelOrbis Shanghai Continuing the trend of the previous weeks, China's billet prices kept going up throughout the past week, while the slab market remained stable on the whole. On January 17, the price of common carbon billet in Tangshan, Hebei Province had risen RMB 40/mt ($5/mt) to RMB 2,820/mt ($363/mt), while that of 20MnSi was up RMB 50/mt ($6/mt) to RMB 2,870/mt ($369/mt). As regards slab, the ex-factory price from Laiwu Steel has remained constant at RMB 2,850/mt ($367/mt). Although China's finished steel market no longer managed to continue its upward trend over the past week, the overall market still fluctuated at a high level, leaving a good profit margin for the rolling mills. In this case, the rolling mills are enthusiastic about production, resulting in brisk demand for billet. Due to the tight supply in northern, eastern and southern China, some traders and mills turned to the northeastern region for procurement, boosting up the billet prices there. The rising raw material prices pushed semis producers to take advantage of every opportunity to hike their ex-factory prices. The continuous price increases in iron ore and pig iron has seriously narrowed their profit range, thus creating strong momentum for billet price increases. In addition, the increasing export quotations of CIS billet to Southeast Asia have also created good conditions for the rise of Chinese quotations. Sources report that some mills have hiked the export quotation of Q235 billet by $ 10/mt to $ 415-420/mt FOB. Driven by the above three factors, China's billet prices have seen a continuous climb. In consideration of the tight supply and rising costs at present, the market is likely to remain in its upward trend in the coming days. As regards the slab market, with its balanced supply and demand relationship, the market has remained stable overall. However, unlike the previous week, some mills tried to raise their slab export quotations last week, attracting the attention of the whole market. Once the new quotations are accepted, the other mills will soon follow suit.