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China’ steel mills and traders have renewed their interest in exporting, lured by the far higher global steel prices that are more than sufficient to cover the difference now that Beijing has removed tax rebates on most of the commercial-grade steel exports since May 1, market sources shared on May 8, a make-up working day in China after the Labour Day holiday over May 1-5.
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China’s domestic steel prices have been on another round of climb-ups after the Labour Day holiday over May 1-5, all according to Mysteel’s assessments, as both domestic demand and market optimism had been lending support, and steelmaking raw material prices have been following closely behind, Mysteel Global noted.
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Mysteel’s assessment on the Q235 150mm square billet price in Tangshan, North China’s Hebei province, jumped Yuan 70/tonne ($11/t) from April 30, reaching Yuan 5,060/t EXW and including the 13% VAT as of May 5, despite the Labour Day holiday over May 1-5, as domestic demand from the local re-rollers has strongly recovered on their restarting the rolling lines, market sources indicated.
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Chinese traders saw their inventories of steel at hand decline further over April 23-29 as business throughout this month remained steady, new Mysteel data shows. But market sources warned that the pace of stocks digestion may wane a little early next month from the disruption caused by the coming Labour Day holiday over May 1-5.
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The steady climb in Chinese steel export prices which began after Chinese New Year in late February continued last week, and export sales, especially those of hot-rolled coil (HRC), regained their pace even though the issue of the rebate cuts remains undecided, according to Mysteel’s latest report.
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Tangshan Q235 150mm square billet price, a barometer of China’s steel market sentiment, stayed largely stable over April 19-23, with the price assessed by Mysteel at Yuan 4,950/tonne ($762/t) EXW and including the 13% VAT as of April 23, or having reversed up but by just Yuan 10/t on week, though demand may shrink in the last week of April with the ongoing suspension of local steel re-rollers.
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Finished steel prices in China’s physical and futures markets strengthened over April 19-23, which was mainly due to the newly-imposed curbing on the steel mills’ steelmaking facilities in Handan, North China’s Hebei province since April 21 until June 30, Mysteel Global noted.
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The inventories of major finished steel items held by the Chinese traders Mysteel regularly canvasses declined for the seventh week in a row during April 16-22, falling by another 1 million tonnes on week, Mysteel’s survey has found. And though the pace of the decline slowed from the 1.5 million tonnes on-week drop during the prior period, market watchers suggest the slower decline will make no dent in the strong steel prices prevailing now.
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The pickup in Chinese steel export prices which began after the Chinese New Year holiday in late February continued last week, partly because the issue of a possible cut in export tax rebates on steel remains be clarified. As a consequence, Chinese steel suppliers have adopted different strategies to cope with the policy uncertainties, Mysteel Global understands.
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The price of Q235 150mm square billet in Tangshan, a pointer to Chinese steel market sentiment, reversed down by Yuan 100/tonne ($15.3/t) on week to Yuan 4,940/t EXW and including the 13% VAT as of April 16, as billet supply has been easing and demand shrinking, Mysteel’s latest report showed.
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The steel-price uptrend in China slowed down last week as prices were still hovering at a comparatively high level, leading end-users to become more sensitive to purchasing, Mysteel Global noted.
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The stocks of finished steel held by Chinese traders sampled by Mysteel declined by another 1.5 million tonnes on week over April 9-15 amid steady steel demand and despite steel prices still hovering high, Mysteel Global noted.
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Chinese steel mills have gradually resumed offering for export, in the absence of a definite statement from the central government regarding possible cuts to steel export tax rebates. Nonetheless, savvy Chinese shippers are factoring in possible changes when providing offers or formulating contracts, market sources indicated on April 14.
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The tightness of billet supplies in Tangshan, home to over 100 steel re-rollers, has eased slightly thanks to deliveries from other regions in China and from shipper abroad, according to Mysteel’s latest weekly survey.
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China’s domestic carbon steel prices including both longs, flats and semis such as billet stayed on the uptrend over April 6-9 on the support of solid demand and still high production costs, though the remarkably rising steel prices in the past three weeks or so have weighed heavily on end-users, Mysteel Global noted.
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Robust demand saw finished steel inventories at Chinese trading warehouses sampled by Mysteel continue to drop over April 2-8, making for their fifth straight weekly slide, the latest survey showed.
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Chinese steelmakers were not keen to chase export business last week, due to hot domestic sales and the uncertainties still hanging about whether the central government will cut steel export tax rebates, industry sources said.
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Gross billet profits among ten steel mills in Tangshan, the top steel producing city and billet supply base in North China’s Hebei province under Mysteel’s survey averaged Yuan 1,024/tonne ($156.3/t) as of April 2, or above the threshold of Yuan 1,000/t again since August 2018.
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The steel prices in China’s domestic market jumped over March 29-April 2, as the demand especially for long steel products had strengthened significantly with all construction works across the country now in full swing, Mysteel’s series of related surveys showed.
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Chinese steel traders saw their stocks of finished steel decline further over March 26 to April 1, falling by 1.6 million tonnes on week – faster than the 1.5 million tonne- decline the previous week – mainly due to the further strengthening of demand, Mysteel Global noted.
