China’s steel mills raised their steel export offering prices by another $5-10/tonne last week, or at least two months in a row to reflect the appreciation of Yuan against the U.S. dollar, though their primary target of sales has stayed firmly at the domestic market, Mysteel Global understood from the market sources.
Over August 22-28, China’s export offering prices of SS400 4.75mm hot-rolled coil (HRC) increased another $7/t on week to $512/t FoB Tianjin port on average, and that of the SPCC 1mm cold-rolled coil (CRC) grew further by $10/t over the period to $559/t FoB Tianjin port on average, while the B500B 18-25mm rebar offering price remained unchanged at $482/t FoB Zhangjiagang port, East China’s Jiangsu province, according to Mysteel’s assessments.
“At the Tianjin port, HRCs are being offered at around $510-515/t FoB, which are of no competitiveness in the global steel market, and little wonder that no buyers showed any interest (in Chinese products),” a Beijing-based steel analyst shared.
Last week, the SAE1006 HRC from India of comparable quality was offered at $515/t CFR Vietnam, he noted.
“Overseas demand for steel has been recovering, but higher-priced Chinese steel products are not attractive at all to most buyers,” he added.
At the same time, China’s steel imports had quietened last week, mainly on higher offering prices from the overseas suppliers and thus narrowing price gaps against the Chinese product, Mysteel Global noted.
As of August 28, the 5sp billet offer price from Vietnam, for example, rose to $445/t CFR China, which was almost matching the ex-work offering price of the billet with equivalent quality from the steel mills in Tangshan, North China, which was at Yuan 3,018/t ($442/t), also excluding 13% VAT.
“Most of the market insiders anticipate China’s steel prices to peak in the near term for this year, and the imports booked at the end of August will not arrive China until October or November, which has also dampened the enthusiasm of importing steel from abroad,” the Beijing-analyst shared.
Both the global and China’s steel markets are still troubled with uncertainties because of the pandemic, as Australia has recently also fallen victim to the negative impact, officially into economic recession, with the GDP having suffered its biggest drop in the record since 1959.
Many market participants are also concerned that the heaviest blow may not have been delivered to the global economy, as the rescue efforts from many countries have not waned off yet.
This article has been published under an article exchange agreement between Mysteel Global and SteelMint Research.
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