Steel Billet Market Report January 2014
2014-02-17 12:49:24 【Print】
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With stark contrast with previous years, all steel enterprises did not expand production in large scales at the beginning of 2014. On the contrary, steel billet market declined weakly in line with the softening of steel prices as demand from steel market weakened and traders were not inclined to carry out winter storage in large volumes. Prices of steel billet Q235 150*150mm declined by RMB160/t in Tangshan, Hebei, RMB160/t in Wu’an, RMB80/t in Liaoning and RMB120/t in Shandong this month. As for the decline in the whole nation, steel billet market saw an average decline of RMB122.85/t in prices.
Several factors were ascribed to the price slump of steel billet. Firstly, in the aspect of downstream demand, weak demand from end steel market impacted requirement of steel billet from steel rolling enterprises. Secondly, upstream market declined. Raw material markets, including iron ore, coke, coal and steel scrap markets, declined, offering no supports for steel billet rates. Thirdly, traders were optimistic about market outlook in the same period of last year, but the market kept in the downtrend by June, 2013 after the Spring Festival. So, traders and steel rolling enterprises became less active in stockpiling, realizing only 1/3 in winter storage of that of the same period of last year. Fourthly, participants were more inclined to make purchase at lower prices, and were bearish about the market after the Spring Festival. Consequently, steel billet buyers took wait-and-see attitude towards the market. Fifthly, traders were unable to operate in large volumes in the market due to liquidity capital tightness and the market saw slack deals.
Several factors were ascribed to the price slump of steel billet. Firstly, in the aspect of downstream demand, weak demand from end steel market impacted requirement of steel billet from steel rolling enterprises. Secondly, upstream market declined. Raw material markets, including iron ore, coke, coal and steel scrap markets, declined, offering no supports for steel billet rates. Thirdly, traders were optimistic about market outlook in the same period of last year, but the market kept in the downtrend by June, 2013 after the Spring Festival. So, traders and steel rolling enterprises became less active in stockpiling, realizing only 1/3 in winter storage of that of the same period of last year. Fourthly, participants were more inclined to make purchase at lower prices, and were bearish about the market after the Spring Festival. Consequently, steel billet buyers took wait-and-see attitude towards the market. Fifthly, traders were unable to operate in large volumes in the market due to liquidity capital tightness and the market saw slack deals.
