Restrained increase in Chinese billet prices
Healthy sales volume pushed up
billet prices in northeastern and eastern
China this past week; however, traders cautious attitudes kept the price rise in check.
After suffering great losses due to the continuous sharp fall in finished steel prices since early this year, traders have adopted a sales policy of quick purchasing and quick selling. In spite of the low market inventory, the traders swift turn around on their products did not push up the prices as much as might have been expected. This is because traders are hesitant to increase their prices blindly, for fear that they may get stuck holding onto excess inventory.
In Liaoning Province, the common carbon
billet price of Beitai Steel rose RMB 20/mt ($2) to RMB 2600/mt ($322) compared to the previous week, and the 20MnSi price rose RMB 60/mt ($7) to RMB 2680/mt ($332). The common carbon
billet price in Jiangsu Province rose RMB 40/mt ($5) to RMB 2760/mt ($342), and the 20MnSi price rose RMB 40/mt ($5) to RMB 2790/mt ($345).
Tangshan was a different story, however, as prices slightly decreased due to a lack of activity. Compared to the previous week, the common carbon
billet price in Tangshan, Hebei Province, was down RMB 10/mt ($1) to RMB 2560/mt ($317), while the 20MnSi price was unchanged at RMB 2600/mt ($322).
The market prices in Tangshan slightly declined as few transactions took place. According to some steelmakers, many steelmakers in eastern
China purchased 20MnSiV and 20MnSiNb from Tangshan to produce HRB400
rebar. As domestic
rebar prices continued to decline, many steelmakers and traders prepared to export their products to South
Korea and
Southeast Asia. The rising price of vanadium has forced steelmakers to turn to cheaper alternatives like niobium, which can meet the requirements for producing HRB 400
rebar. The price of semi-finished products in northern
China is expected to see a stable upward trend in the short term.
Overall, traders cautious attitudes suppressed the rise in market prices. Additionally, the limited orders they got made them even more cautious. Consequently, semi-finished prices fluctuated slightly following the price trend of finished steel products.
SteelOrbis Shanghai