China’s steel giant, Baoshan Iron & Steel has kept its HRC/CRC prices unchanged consecutively for fifth month amid weak market sentiments.
The company’s pricing policy usually reflects the mood of Chinese steel industry as a whole. Thus China’s flat steel export offers are also anticipated to remain stable in the coming month.This decision to keep prices unaltered is an attempt by the company to stabilise the already pressurized steel market.
China’s steel industry is dealing with sluggish domestic demand and overcapacity since last one year. Its steel consumption is expected to reach 668 MnT this year, down by 4.8% Y-o-Y basis. It is also anticipated that China’s steel demand would dive by about 5% in the following 12 months.
As prices of steel products slumped to record low, mills in the country sought for sales in overseas market. Chinese steel exports are recorded at 102 MnT in first 11 months of 2015 as per customs data.
Amid growing trade tensions, Beijing announced removal of tax rebate on boron-containing steel in the start of 2015. However as an alternative, Chinese mills started exporting chromium-containing steel which enjoys rebate of 9-13% on its exports.
Thus now Chinese government is planning cut in export tax rebate of chromium-containing steel also. But market sources believe that this would prompt exporters to shift to form alloy steel with other elements such as titanium or manganese.
As reported although Chinese government do not promote export of too much steel, many times individual companies and traders take their own decision to export in order to enjoy legitimate benefits. Thus government there has to come up with concrete measures to deal with the issues of oversupply and excessive exports.
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