Chinese semis producers not confident despite price rebound

SteelOrbis Shanghai The continuous stable trend for domestic finished steel market improved the confidence of rolling mills. However, some semis producers in Tangshan region indicated that they are not optimistic regarding the market in the short-term despite the expanding trading volume last week. According to the semis producers in Tangshan, without any fundamental changes in the demand, there is no big increase range for semi-finished steel prices. Therefore, being still cautious about the market, they hiked the ex-factory prices only by a little margin. Chinese slab price is quite competitive in international market, with export quotation normally around $400/mt FOB. Recently, in spite of the sluggish commercial activity in domestic market, the obvious improvement in China's exports greatly contributed to the stability of slab prices. Based on the latest macro-economic figures released by various countries in the world; the global economy, especially the European economy, will maintain the strong growth. Therefore, as the hot and rainy season in Asia and summer vacation in Europe is passing, the off-season for steel consumption is approaching the end. Semis prices are expected to steadily increase in the future. The latest figures indicated that China's crude steel production totaled 36.0906 million mt in July, up 22.2 percent year on year. The daily production of crude steel reached 1.164 million mt, down 56,400 mt or 4.62 percent compared with the previous month. Despite the month on month decline in crude steel production, the year on year growth saw an increase. China's year on year crude steel production growth in the first six months is below 20 percent, but it exceeded 22 percent in July. This indicates a possible acceleration in production growth, which may curb the future price rise to some extent. Last week, billet prices climbed slightly, while slab prices stopped falling thanks to exports. On August 16, the common carbon billet price in Tangshan, Hebei Province was RMB 2,790/mt ($349) up RMB 10/mt ($1) week on week, and that of 20MnSi was RMB 2,820/mt ($353) up RMB 10/mt ($1). The ex-factory price of Laiwu Steel's slabs retained RMB 2,900/mt ($364) level from the previous week.