SHANGHAI, Apr. 18 (SMM) - Billet prices in Tangshan dropped by RMB 20/mt today. Billet traders in Tangshan began to sell inventories due to the weakening market and cash flow problems, with prices below ex-works prices at local steel plants, between RMB 3,230-3,240/mt. Transactions for small orders between 1,000-2,000 mt were brisk, while transactions of orders above 5,000 mt were muted. Billet inventories were now around 1.50 million mt, down sharply from a high 2 million mt after the Chinese New Year holiday, but recent selling will drag down prices further. Billet prices in Tangshan were between RMB 3,210-3,310/mt in January, meaning cargo holders were mostly in losses.
Prices have been falling this week, with declines expanding today. Prices in Shanghai and Wuhan fell by RMB 30-40/mt, while prices in Guangzhou, Beijing and Hangzhou dropped by RMB 20/mt, with integrate decreases in some cities reaching RMB 60-80/mt, and trading volumes low.
Steelease believes recently falling international commodity prices, tightening credit loans for steel traders and the cancel of urbanization meeting increased negative sentiment of the market, weighing down spot prices and enhancing supply pressure, with a lack of support for demand. With the lack of positive news, prices should extend declines, and will unlikely reverse their declines as long as supply and demand remained imbalanced and steel plants do not cut output.