China is aggressively exporting square billet in international market owing to sharp fall of USD 45/MT in Chinese domestic billet prices and subdued demand.
China has recently emerged as a major billet exporter in international market, and is following the low price strategy for marketing its product. Major destinations are Bangladesh, Turkey and South Asian countries.
Currently, Chinese billet offers have dropped to USD 310-320/MT,CFR Turkey, USD 335-340/MT,CFR Bangladesh and USD 320-340/MT, CFR South East Asian Countries.
Chinese Domestic Billet Prices Down USD 45/MT since Apr’15
During Apr-June’15, Chinese domestic offers declined by USD 45/MT amidst surge in billet production. At the end of Apr’15, Chinese manufacturers were offering billet at USD 335/MT, which sharply came down to USD 290/MT levels in June’15. Due to the decline in prices, the manufacturers are supplying their material in global market at very low prices.
Over-production of Billet and Sluggish Demand
Growth of Chinese economy is at its slowest pace in six years. Shrinking demand and excess steel capacity is hitting critical levels; China’s steel mills have not shown much sign of slowdown in production. This has led to increase in export from China in last few years.
In 2014, Chinese steel export soared by 50% Y-o-Y and continued to grow by 40% in Q1 of 2015. China Iron & Steel Association (CISA) remains bullish that export volumes will continue to increase.
Anti-Dumping Duties on Chinese Products by Several Countries
Chinese steelmakers are facing anti-dumping duties in an increasing number of countries. In March and April, the European Commission imposed a series of anti-dumping duties on certain grades of industrial steel from several countries including China. Also, India’s finance ministry has increased import duty on steel, which will directly impact Chinese steelmakers.
Thus, China is now promoting its new product, billet to countries where there is no such anti dumping or safeguard duties in order to boost its business.
Leave a Reply