Posted on 31 Mar 2021
Business for Chinese steel exports was quiet last week, with some domestic steel suppliers stopping offering prices. However, market enthusiasm for importing strengthened noticeably, thanks to the continuing surges in domestic prices, industry insiders noted.
“Steel mills now seldom offer prices. They are waiting for a definite answer on tax rebates,” an industry source based in Beijing explained. In recent weeks, widespread rumours have been circulating that China may announce a cut in tax rebates on certain steel exports from April, as Mysteel Global reported.
“Some exporters have transferred contracted hot-rolled coils (HRC) to bonded areas, in order to mitigate any losses as a result of a rebate cut, while others have been trying to move April shipments forward to March, to avoid risks,” a Shanghai-based source observed.
The cooling of export vigour was also due to poorer demand from the ASEAN region, amid the resurgence of COVID-19 cases in Philippines, market sources noted, pointing out that some Vietnam buyers had also turned to India for imports due to the continuous rise in Chinese offer prices.
As of March 26, the export price of Chinese-origin SS400 4.75mm HRC price was $760/tonne FOB at Tianjin port, North China’s Tianjin municipality, higher by another $22/t on week, according to Mysteel’s assessment.
Meanwhile, the export price of Indian-origin SS400 4.75mm HRC price declined $20/t on week to $760/t FOB from India, according to Mysteel’s tracking.
In the meantime, China’s eagerness for importing steel, including both long steel and billets, has been growing, due to the widening disparity between overseas and domestic prices, sources noted.
As of March 26, Tangshan Q235 150mm square billet price, the representative price of China’s billet market, refreshed its 12.5-year high to hit Yuan 4,710/t ($719/t) EXW and including the 13% VAT, as reported.
Meanwhile, last week, Vietnam-origin 5sp 150mm square billets were sold to China at $560-565/t FOB for shipment at the end of April. The freight is around $42-45/t.
“Though the volumes of billets to China were few in March, the arrivals in April are expected to be very high,” an official with a port in East China suggested.
Source:Mysteel Global
