China’s steel export softens, trade warms

China’s steel export prices weakened over September 14-18, their first decline since early May, as steel suppliers – especially traders – lowered their offers when domestic demand turned slack, Mysteel’s latest weekly survey has found. Export trading increased after the gap in prices between Chinese products and those of rivals closed, respondents said.

Last week, China’s export price of SS400 4.75mm hot-rolled coil (HRC) retreated $2/tonne on week to $519/t FOB North China’s Tianjin port, according to Mysteel’s assessment, while the offering price of B500B 18-25mm rebar stayed unchanged at $487/t FOB East China’s Zhangjiagang port.

“Domestic steel prices have been softening continuously, weighing on export offerings,” according to a Tianjin-based industry source, adding that this was despite the fast appreciation of the Yuan against the US dollar which might have seen Chinese exporters raise their dollar-denominated export prices to protect their Yuan profit.

As of September 18, China’s national Q235 4.75mm was Yuan 3,950/tonne ($581.7/t), down Yuan 35/t on week or by Yuan 64/t since the beginning of September, according to Mysteel’s database.

While Chinese steel export prices have reversed down, rivals abroad also targeting global buyers had been hiking their prices to reflect recovering demand internationally, according to the report. Consequently, the price gap between China-origin steel products and those of makers in other countries has narrowed or closed, with some Chinese prices even undercutting their competitors’ prices.

“Last week, the FOB price for Chinese HRC was around $510/t whereas India’s FOB price for the same product was up to $525/t,” a market watcher based in Beijing told Mysteel Global. Mysteel’s weekly survey also recorded that last week, China’s SAE1006 HRC was offered at $535-540/t CFR Vietnam, yet SAE1996 HRC from Japan to Vietnam was offered at $549/t CFR.

“Recently, business in China’s home steel market has been weak, and most steel traders are pessimistic about steel market fundamentals in Q4, so maybe the export price will fall further,” the Beijing source suggested.

Another consequence of the closing of the export price gap has been that China’s steel imports have cooled markedly of late. “Barely any semi-finished orders were concluded last week,” the Beijing source observed. The major steel products that China has been importing this year consist mainly of semi-finished steel and HRC, Mysteel Global understands.
Source: Mysteel