Tangshan sees slight drop in billet prices

Thursday, 01 February 2007 12:22:15 (GMT+3)   |  
       

SteelOrbis Shanghai Following the previous excessive price increase, billet prices in Tangshan continued to drop over the past week, while the other regions still remained stable. The slab market, meanwhile, did not see any overall change. On January 31, the price of common carbon billet in Tangshan, Hebei Province was down RMB 80/mt ($10) week on week to RMB 2,870/mt ($369), while that of 20MnSi was down RMB 30/mt ($4) to RMB 2,920/mt ($376). As regards slab, the ex-factory price from Laiwu Steel remained constant at RMB 2,950/mt ($380). Affected by the anti-pollution inspections carried out by the environment protection authorities in the previous week, some small Tangshan-based mills temporarily stopped production. Other mills, however, availed of this opportunity to hike their ex-factory prices sharply. Nevertheless, since it is now close to the end of the lunar calendar year, demand has become weak on the downstream side. Thereby, the rolling mills are standing aside from the current high price levels of billet. Furthermore, after the conclusion of the environment protection inspections, the small mills restarted production one by one and recovered their market shares by offering low prices, resulting in decreased market prices. According to the views of some local market players, the unstable situation reflected by the previous week's rapid price increases and last week's continuous decline will not last for a long time, but is just temporary. At present, with the brisk demand in both international and domestic markets, prices of iron ore, coke, scrap and pig iron are on an upward trend, leading to rising production costs for semi finished steel. Thus, semis prices are expected to become stable before the holiday and to continue to climb thereafter. The price drop in billet prices in Tangshan did not have any great impact on other regions. The market in eastern China and southern China moved steadily up, while prices in the northeast and northwest remained unchanged. All in all, China's billet market is showing a slight upward trend. Turning to the slab market, prices continued to maintain their stability. Since the international flat rolled market is not as strong as the long products market, the export price of China's slab will not jump up by a big margin, while domestic demand is not sufficient to boost up market prices. Due to the brisk demand for long products in the Russian market, Chinese mills have become the major supplier of billet in the local market. Sources report that a mill in Vietnam declined to purchase when faced with the increased Chinese billet quotations and had to stop production due to the lack of an alternative purchasing channel. In the current situation, China is not only the major supplier in Southeast Asia, but is also responsible for determining the price levels.

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