China’s steel exports stagnate, imports up

China’s steel exports stagnate, imports up

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China’s steel exports remained sluggish over April 20-24, as global steel demand stayed tepid and offering prices from the Chinese exporters lacked competitiveness, but China, the world’s top steel production country, had been importing more because of lower prices for overseas supplies, market sources shared on April 28.

“China’s steel producers have been concentrating on domestic sales, while holding on to their export offering prices. There have heen hardly any orders from overseas,” a Beijing-based market analyst commented.

Over April 20-24, China’s SS400 4.75mm hot-rolled coil (HRC) was offered at $403/tonne FOB Bayuquan port, Northeast China’s Liaoning province, or down $5/tonne on week. In comparison, India’s SAE1006 HRC was offered at $385-390/t FOB and the S235JR 2.5mm HRC from the Commonwealth of the Independent States were offered at only $360-370 FOB last week.

As for long products, the B500B18-25mm rebar was offered at $427/t FOB Shanghai port, East China, down $3/t on week, while B500B rebar from Turkey was offered at $410-415/t FOB by Izmir Demir Celik Sanayi A.S., Turkey’s leading billet and bar producer after have resumed operations at its bar and section rolling mills since April 21, Mysteel Global understands.

Lower overseas prices, thus, saw the recent surge in China’s carbon steel imports, and a sizeable importer were reported ordering 150,000 tonnes of HRC from South Korea and India for deliveries in early June, with the transaction prices ranging $380-385/t CFR Guangdong, South China, according to a steel trader from East China’s Shandong province.

“Based on the SHFE (Shanghai Futures Exchange) HRC futures price and taken into consideration of other expenses, the imports will still rack up a profit of Yuan 267-300/t ($37.7-42.3/t),” he shared, adding that cheaper imports will be imposing pressure on domestic steel prices.

The Beijing analyst agreed, expecting China’s steel imports to continue in the near term, thus exerting downward pressure mainly on the prices in South and East China.

“With rather firm domestic steel prices in China, steel products such as HRC, billet, slab, medium plate, and high-speed wire rod from Russia, South Korea and India have and will be flowing into China, with a lot to be delivered to Huangpu (Guangdong) and Jiangyin ports (East China’s Jiangsu province) over June-July,” he said.

As of April 24, Mysteel’s national price of Q235 4.75mm HRC showed signs of waning, down Yuan 12/tonne on week to Yuan 3,405/t including the 13% VAT.  

China usually imports about 10 million tonnes of finished steel annually, but this year the import volume for the first few months have been much higher, Mysteel Global understands.

In Q1, China’s total steel imports reached 2.9 million tonnes, up 9.7% on year, and the tonnage for March alone was 1.1 million tonnes, or up 26% on year, according to China’s official data.

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