China’s exports of flat steel increased by 5.1% on year to 4.1 MnT during April, the volume being largely unchanged from March, according to the latest statistics from the General Administration of Customs of China (GACC) published on May 23. However, market sources remain bearish about export prospects, given the low global demand and high domestic steel prices.
The on-year rises in exports were mainly due to the fact that in February and March, domestic traders were keen to export steel given their extremely high steel stocks and sluggish demand at home, Mysteel Global noted.
However, market sources are pessimistic about the export market near-term. “Some countries have resumed work step by step and some car manufacturers have restarted operations too, driving demand up a bit. However, China-origin steel products are not their first option as Chinese steel is regarded as too expensive, and products from Japan, South Korea and India are far more popular,” a Shanghai-based steel trader said.
Reflecting the surge in domestic steel prices this month, the export offer price for 4.75mm hot-rolled coil (HRC) has increased to some $430-440/MT FOB China currently from $400/MT at the start of May, according to the trader.
China’s national average price for Q235 4.75mm HRC assessed by Mysteel moved up Yuan 195/MT ($27.3/MT) or 5.7% from May 6 to reach Yuan 3,646/MT as of May 25 – equivalent to $511/MT.
“As the virus has spread across the world, our orders have sharply declined,” the Shanghai trader admitted. “Though demand has recovered slightly now, the high prices are still dampening exports,” she added.
Another Shanghai-based steel trader expects to see prices retreat in the near term. “A large quantity of steel imports will arrive at ports in South and East China in the next two months, which may weigh on domestic prices. Besides, the persisting high levels of steel production at home are also threatening the market,” he stated.
Over January-April, China’s flat steel exports totalled 12.9 MnT, declining by 8.2% on year, the statistics showed.
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.
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