Chinese billets bounce back

Chinese billets bounce back

Price increases this week in finished products spilled over to billets, snapping a two-month slump. 20MnSi prices saw large increases as transaction volume picked up considerably. Prices and transaction volumes of other specifications increased slightly. Price declines in finished products came to an end as market confidence was renewed following the China Iron and Steel Association (CISA) meeting held on October 21. Rolling mills bought large quantities of billet products, and those rebar producers who had suspended their production were also becoming actively involved in purchasing. In response, a majority of steelmakers increased their ex-factory billet price. However, activity was limited after some steelmakers increased their ex-factory prices for slabs. Compared to the previous week, by the end of trading on Wednesday, October 26, common carbon billet prices (90-day deferred payment) in Handan were up RMB 30/ton ($4) to RMB 2’480/ton ($306); 20MnSi billet prices had risen RMB 60/ton ($7) to RMB 2’540/ton ($313); 16Mn billet was up RMB 40/ton ($5) to RMB 2'540/ton ($313); and Q345B had increased RMB 40/ton ($5) to RMB 2’540/ton ($313). The actual deal price of Laiwu Steel’s common carbon billet remained unchanged at RMB 2’450/ton ($302). Generally speaking, the supply of finished and semi-finished products has not been curbed effectively due to manipulation by market players. Furthermore, the inventory in steel mills as well as in the market has not dropped. Although prices of finished products and billet are in an upward trend, many steelmakers and traders are optimistic, yet cautious, about the future of the market. They think there is a large amount of room for price increases for billets and long products such as rebar. However, they hold a pessimistic view towards flat products and slab. Hot rolled sheet/coil and medium plate prices might decline in the short term. SteelOrbis Shanghai