Semis prices remaining high due to strong international demand

SteelOrbis Shanghai Chinese steel output reached to a new record level in March 2006, while semi finished steel exports decreased 79.4 percent year on year. Chinese semi-finished steel export prices saw a rapid increase, while the transaction volume saw a decline due to high prices last week. China exported 300,000 metric tons of semi finished steel in March, down 79.4 percent from a year earlier, while the imports were 50,000 metric ton, down 64.2 percent compared to 2005. The cumulative export of semis in the first quarter was 890,000 metric tons, down 69 percent year on year, while the cumulative imports of semis was down 74 percent to 100,000 metric tons. As the semis prices in the international market have kept increasing, offers for common carbon billet in Black Sea from the CIS countries reached $380-390/mt FOB. The deal price of a batch of Chinese 20MnSi billet exported to Vietnam was at $400/mt FOB last week. In recent days, offers for Chinese Q235 billets for export to Southeast Asia are at $400-405/mt CFR. But as the price level has not yet been accepted by customers in Southeast Asia, most traders hold “wait-and-see” attitudes. Having increased continuously in April, Chinese semis prices are now at a relatively high level. The rolling mills are becoming more and more cautious, and they are not very eager to place new slab orders. In addition, the rebar producers are not active in buying billets as the rebar prices failed to get in an upward trend. The production tasks of semis producers are full until mid-May, and it is unlikely for semis prices to decline in the short term. Chinese semis prices may remain stable in the following week.