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WEEKLY: China’s steel export prices continue to surge

Chinese steel producers hiked their prices of steel products for export for the third week last week, even though steel prices at home had been softening, particularly those of long steel, Mysteel Global noted.

Over November 21-27, the export price of Chinese SS400 4.75mm hot-rolled coil (HRC) increased by another $18/tonne on week to $569/t FOB North China’s Tianjin port, with the growth being higher than the $15/t rise seen in the prior survey period, according to Mysteel’s assessment.

Meanwhile, the price of B500B 18-25mm rebar also moved up by another $11/t on week to $535/t, as against the on-week rise of $10/t over the prior week.

Nevertheless, domestically, Mysteel assessed that the national price of HRB400 20mm dia rebar, the pulse of China’s steel market, had declined by another Yuan 61/tonne ($9.3/t) on week to Yuan 4,113/t including the 13% VAT as of November 27. Market insiders blamed weakening demand, especially in Northeast China where outdoor construction activity had been suspended after temperatures had fallen to below -20 degrees Celsius.

Supported by firm demand from China’s automobile and other manufacturing industries, the domestic price of Q235 4.75mm HRC stayed strong, rising by Yuan 33/t on week to Yuan 4,138/t also including the VAT as of last Friday.

“(Chinese) steel mills are very determined to support export prices. Now they are selling products for shipment in March and they are sure that domestic demand will be good by then,” a steel analyst based in Beijing observed.

Yet, after the continuous hikes in steel prices, most overseas buyers have adopted a strong wait-and-see mood. Last week, large quantities orders were only concluded for HRC while export business involving other kinds of products was limited, Mysteel’s tracking showed.

“Although Chinese HRC export prices have surged to very high levels, they remain competitive against the products of rivals,” the Beijing analyst observed. Offer prices of HRC from CIS countries exceeded $580/t FOB Black Sea, according to Mysteel’s tracking.

Last week meanwhile, the enthusiasm of Chinese steel importers lessened with the weakening of domestic prices. The acceptable price level that Chinese buyers of imported billets would be prepared to pay was around $480/t CFR China, equivalent to $440-445/t FOB Black Sea. However, the offers of CIS countries were generally at $450-460/t FOB Black Sea, Mysteel understands.

Written by Olivia Zhang, zhangwd@mysteel.com

Edited by Russ McCulloch, russ.mcculloch@mysteel.com