Semis inventory down in China

SteelOrbis Shanghai Thanks to the strong demand from both home and abroad, Chinese common carbon billet prices keep increasing, while the prices of 20 MnSi billet are stable. On the whole, the inventory in steel mills is going down. Last week, the prices of strip steel and section bar went up, while rebar prices did not pick up obviously. The common carbon billet prices are strong, but 20 MnSi prices are weak. Therefore, the price difference between the two products, which was over RMB 100/mt ($12) a couple of weeks ago has dropped below RMB 50/mt ($6) recently. Even in Tangshan, common carbon billet prices are higher than those of 20MnSi billet. SteelOrbis learnt that only one mill in Tangshan still continues producing and selling 20MnSi, while other mills do not. In addition, due to the full production tasks, there's tight availability of semis products in market for the time being. Besides, the inventory of the country is also shrinking. According to preliminary statistics, the current inventory is at the half of the normal level. Even, steel mills do not accept orders from traders for exports. Nevertheless, slab exports are relatively stronger than billet exports. Currently hot rolled coil prices are around RMB 3,800/mt ($474) while slab prices are around RMB 2,900-3,000/mt ($362-375). However, wire rod prices are around RMB 3,200/mt ($400) while billet prices are around RMB 2,800-2,900/mt ($350-362). Chinese semi finished steel market is expected to remain strong, and 20 MnSi billet prices to move upwards.