Chinese Steel Export Price Correction Halts as Big Manufacturers Raise Offers

Price rally in China’s domestic flat steel market, which has been continuing since last two months, finally came to an end with the start of this week.

Domestic HRC prices in China fell by RMB 280-300/MT (USD 43-46) in Shanghai and RMB 350-370/MT (USD 54-57) in Beijing. With fall in domestic prices, the country’s HRC prices also plunged by USD 50-60/MT from USD 450-460/MT to USD 410-415/MT, FoB China.

Reason behind sudden plunge

The surge in Chinese HRC prices in Feb’16 was mainly driven by production cuts announced in Tanghsan city due to upcoming International Horticulture Expo in the city for six months from May to Oct.

In anticipation that there will be shortage of material in coming months, market participants purchased huge stocks, resulting in subsequent price rise in domestic flat steel market. However, as there is no significant improvement in domestic steel demand of China, traders started offloading their material at lower prices amid negative outlook for the month, resulting in drastic price corrections.

Why price corrections halted?

Today, few of the Chinese steel firms have raised their flat products list prices for late June delivery, leading to rise in domestic HRC prices by RMB 200-250/MT (USD 30-40). However, sentiments remained shaky amid uncertain outlook. Current HRC prices in China are heard at RMB 2,710-2,720/MT (USD 416-418).

Other countries offers

HRC offers from CIS countries are assessed at USD 450/MT, FoB Black Sea. Whereas from Korea and Japan, the same is assessed at USD 460-465/MT, FoB.

HRC prices as on 12 May’ 16

Source: SteelMint Research