Rebound for Chinese billet prices

SteelOrbis Shanghai Driven by the brisk commercial activity, Chinese billet prices began to rebound since the end of last week, while the slab prices began to go down. On July 26, the common carbon billet price in Tangshan, Hebei Province increased RMB 60/mt ($8) week on week to RMB 2,740/mt ($343), and that of 20MnSi increased RMB 50/mt ($6) to RMB 2,800/mt ($351). The slab price decreased RMB 100/mt ($13) to RMB 3,100/mt ($388). As the long product prices have become gradually stable, the rolling mills started expecting a progress now. In addition, as the billet prices are currently at a relatively low level, the mills began to purchase billets, resulting in a better commercial activity. Meanwhile, some billet producers arranged overhauling works and stopped production in recent weeks because they could not afford the production cost, which has led to the decline in supply. Furthermore, the low price of Chinese billets has attracted many international inquiries, which strengthened the confidence of steel mills. For these reasons, billet prices saw a sharp increase last week. However, due to the slack demand season and the pressure of macro-control measures, the demand situation is not expected to turn much better in short term. Besides, the steel mills will resume billet production due to the rise in prices, which will increase the supply. Therefore, it is not quite possible for billet prices to continue the upward trend. On the other hand, all flat rolled product prices have remained in the downward trend since the beginning of July, and slab prices are not expected to rebound in the short term. In short, since both the international market and the domestic market are in a downward trend, semi finished steel prices may not turn better in short term. Billet prices are expected to see ups and downs, while slab prices may continue going down next week.