SteelOrbis Shanghai
It seems that, the brisker demand at home and abroad has tightened Chinese
billet supply last week. Some steel mills did not accept new orders, because they have filled the order books.
Chinese
billet demand saw a remarkable rise through the last seven days week. The exports still maintained the roaring
trading volume, and the rapid expansion in domestic demand boosted up domestic market prices.
On the exports side, with the rainy season in
Southeast Asia coming to an end, inquiries from abroad increased sharply. Furthermore, in addition to the steadily climbing
trading volume, Chinese
billet prices rebounded after having touched the bottom in August, leading to the rise in export quotations from
semis producers. At present, the mainstream export quotation of common carbon billets is at $380-390/mt FOB, up $5-10/mt compared with the previous two weeks.
On the domestic side, many steel mills announced their ex-factory prices for September in the previous week. In particular, the price hike of long products announced by the five leading mills in Northern
China fuelled the long product price rise in Northern
China and even the whole country.
On September 6, the price of common carbon
billet in Tangshan, Hebei Province increased RMB 40/mt ($5) week on week to RMB 2,850/mt ($359), that of 20MnSi increased RMB 50/mt ($6) to RMB 2,920/mt ($368).
Laiwu Steel kept its ex-factory price of
slab unchanged at RMB 2,900/mt ($364).
Rolling mills are quite optimistic about the future, so they increased their
billet purchases, causing to the currently tight
billet supply in all regions. The
production plans for September of Shandong Rizhao and many other steel mills have already been fully scheduled; therefore, they can not accept any other orders.
Billet producers are also optimistic about the future of the market, and they are not willing to set the prices for October according to the present market price level as they think the prices may go up further. Therefore, most mills will not accept orders for October until late September.
In the current Chinese
semis market, the expansion in
trading volume caused the
semis producers to hike the ex-factory prices. Meanwhile, rolling mills are worry about further rise in
billet prices; therefore, they are increasing the purchase, which again pushes up the
semis prices.
Chinese steel market is in the beginning of the upward trend yet, and finished steel prices are expected to keep going up. Therefore, the current upwards trend of the semi-finished market will last for some more time.