The dynamics in the market have been affected by the weakening of China's domestic trade prices and flat export offers.
Chinese domestic trade prices continued to weaken until mid-week, while export offers remained broadly stable. Chinese 3sp billet offers remained unchanged from the previous week at USD 500-505/ton FOB.
During the first week of June, the steel billet price in Tangshan Qian'anpu district stood at 3,440 yuan (474 USD) Domestic including tax. The billet price in Songtingpu district, on the other hand, dropped by 10 yuan from the previous trading day to 3,440 yuan (474 USD) ex-works. Spot billet prices were trading at 3500-3520 yuan (483-485 USD) in Tangshan district and 3480-3500 yuan (480-483 USD) in East China, with a weakening trend. Finished goods prices remained largely stable while overall trading volume remained average.
On the same date, warehouses in the Tangshan region held a total stock of 724,100 tons of steel billets, with a total daily inflow volume of 29,100 tons and an outflow volume of 21,400 tons.
At the end of the first week of June, the billet price at Xinhua Shandong Port was reported at 3,475 yuan/ton (USD 479), down 15 yuan/ton (0.43%) from the previous trading day.
Production continued to increase this week and inventory depletion slowed down significantly. Currently, raw material prices are falling, shifting the center of gravity of steel costs downwards. The operating rate of blast furnaces and average daily liquid steel production are still in progress.
Overall supply and demand situation in the city and the rise in inventory levels are a cause for concern. However, given the current dynamics and trade volumes, billet steel export prices are expected to show a slight strengthening in the short term. The domestic market is showing signs of recovery and the increase in trade transactions may have a positive impact on export prices.
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