China’s HRC Export Offers Stable on Lack of Activity

After surge in Chinese HRC export prices reported by SteelMint last week, offers this week have remained stable. Current offers for 2.5mm HRC is being assessed at 275-280/MT, FoB China and at USD 295-300/MT, CNF India basis.

With the start of Jan’16, China’s domestic market have picked up and mills there are not much keen in export offers. It is anticipated that China’s export prices are likely to hover at current levels till Chinese New Year holidays in second week of Feb’16.

However Indian importers are not much keen in booking imports from China owing to BIS certification being made mandatory from 18 Mar’15. As per SteelMInt study only few Chinese mills have BIS license.

Here is the list of various Chinese companies having BIS license for flat steel grades like IS 2062, IS 2041, IS 277 and IS 648.

Source: SteelMint Research

IS 2062: Hot rolled medium and high tensile structural steel (excluding bars and rods of                      diameter or thickness less than 6 mm and structural below 50 mm x 50 mm x 6 mm)
IS 2041: Steel plates for pressure vessels used at moderate and low temperature
IS 648: Cold rolled non-oriented electrical steel sheet and strip–fully processed type                             (CRNO)
IS 277: Galvanized steel sheets (plain and corrugated)

HRC offers from Korea, Japan and CIS region are also stable at USD 330/MT from Korea, USD 300/MT from Japan and USD 310/MT from CIS region, CNF India basis.

China to Curb Steel Production

According to a statement released on the Chinese government’s website, the country has fixed a target to cut its crude steel production by 100-150 MnT in coming years in order to deal with its overcapacity.

Also it is reported that Chinese government will set up a fund in order to help steelmakers to reduce their workforce and dispose off their bad assets.