US semis market softening along with finished product market

In contrast to the strengtheningbilletprices in other major world markets, the USbilletmarket is currently slowing down. The main culprit behind the weak USbilletmarket is the sagging demand caused byproductioncuts for long products. In general, long product mills are scaling backproductionofwire rodandrebar,缘由起诉re more billets are available for sale in the spot market. Domestically, thebilletpricing trend is down, and prices should continue softening through the first quarter of 2007, as thelongsmarket and seasonal downturn affect thesemismarket deeply. However, the import pricing trend is stable at the moment. Import billets are primarily coming fromBrazil,Russia, andTurkey. In general,billetimport prices range from $415 /mt to $425 /mt FOBRussiaorBrazil. Boosted by their strong home market,Turkey's asking numbers are now significantly higher, ranging from $445 /mt to $450 /mt FOB Turkish ports. The most recent data from theUS SteelImport Monitor show that during the month of November, the main countries that exported billets to the US were:Brazilat 13,835 mt, andCanadaat 3,178 mt.Russia, which exported 24,525 mt to the US in October, did not export any significant amount of billets to the US in November. On the contrary,Brazil, which exported just 5,868 mt to the US in October, saw a big jump in November. As is the case with thebilletmarket, theslabmarket is also facing the problem of oversupply.Slabimports to the US are mainly coming fromBrazil,Mexico,RussiaandUkraine. In general, averageslabimport prices now range from $450 /mt to $470 /mt CFR FO US Gulf ports, whileMexicois asking for a higher price. The pricing trend forslabimports is still down, and some buyers predict the prices may drop below $400 /mt before the first quarter of 2007. In the USslabmarket in 2007,slabdemand will be less than the previous year, and there will be no short-supply pressure; the market will still have plenty ofslabsupply offers. Even though no immediate turnaround is expected, the market should start to recover in the second quarter. While theslabmarket remains soft, this is not keeping a few dominant suppliers from asking for a price increase of five to 10 percent for long-term contracts. They are trying to boost prices and maintain these higher levels in 2007, to ensure a strong pricing trend. They will not be able to get this increase until the second quarter of next year after the pricing trend turns around. The greatest quantities of import slabs arriving in the US in November came fromUkraineat 92,345 mt,Brazilat 69,717 mt, andMexicoat 67,856 mt, dropping approximately 35,000 tons, 65,000 tons, and 41,000 tons respectively when compared to October.Russia, which was the major exporter of slabs to the US in October, at 208,048 mt, only exported 40,106 mt to the US in November. Meanwhile,Japan, which did not export any slabs to the US in October, exported 34,897 mt in November.Chinawill remain a significant steel supplier in 2007, as theproductioncapacity increases relentlessly and excess tonnage has to be exported. However, the Chinese government would like to discourage the export of semi-finished products through the imposition of a 10 percent export tax.Chinais now looking to focus more on exporting value-added finished products rather thansemis.