The international market drives Chinese semis prices

SteelOrbis Shanghai Chinese semis prices rebounded in the past week thanks to the increase in semis prices in the international market. The strong demand in international market led to continuous increase in semis prices, and this in turn reversed the softened Chinese semis market. At present, China's deal prices for common carbon slab exported to the Philippines and Thailand stand at $ 415-420/mt CFR, while those in the previous several weeks are at $370-375/mt CFR. The offers for Q235 billets exported to Southeast Asia are at $355/mt FOB, while the deal prices at $375/mt CFR. The increase range of Chinese semi finished products is around RMB 300/mt ($37) after the Lunar New Year, while the prices of iron ore, coke, pig iron and scrap are stable on the whole. Therefore, the profits of semis producers are abundant. The sharp drop in semis prices at the end of last year still has some impact on steel mills. Consequently, steel mills are very cautious and not quite optimistic about the market, though their order books are full. Therefore, they will tend to reduce their prices if they do not receive new orders. In general, the supply and demand in the domestic market fail to support the current price levels. Nevertheless, the semis prices in China may increase because of the upward trend in the international market. Billet and slab prices increased from RMB 30/mt to RMB 70/mt ($4-9) last week in local Chinese markets.