Posted on 08 Jul 2021
Chinese steel export prices and trade both remain weak last week, with the price of China-origin hot rolled coil falling for the seventh week in a row. Market sources blamed the outflow of low-priced Russian steel products for the downward pressure on prices.
Mysteel’s export price assessment for SS400 4.75mm HRC was $888/tonne FOB from North China’s Tianjin port as of July 2, down by another $15/t on week – a steeper decline than in the prior week.
“It is really difficult to handle business, after low-priced Russia-made steel products emerged in the market,” an official with an steel exporter based in Northeast China commented.
Russia announced a new decree on June 26 imposing extra taxes on ferrous and nonferrous products over August 1-December 31, with a base rate at 15% and a component rate for each commodity, according to local media reports.
Following the announcement, Russian exporters have rushed to export their steel products – mainly flat steel – before the extra taxes take effect, observed a Shanghai-based industry source.
“While most Chinese steel mills’ offers for hot coil were at $880-900/t FOB, I’ve heard that Russian coils were sold at $850-870/t CFR Vietnam,” he noted.
Another factor causing China’s steel producers to hesitate about exporting relates to concerns that China might itself impose new export taxes.
“The fear is lingering in our mind,” the official commented. “With this (the tax adjustment) unsettled, it is really hard for us to make any business decisions,” he admitted.
A second Shanghai-based steel analyst agreed. “Exporting steel might be slightly profitable for Chinese mills at the moment, but with the large uncertainty (of tax policy changes) looming, the mills will have to consider any increment in export costs as well,” she said.
As for rebar last week, the offer price of China-origin B500B rebar also dipped by another $2/t on week to $777/t FOB from East China’s Zhangjiagang port, according to Mysteel’s assessment as of July 2.
Trading activity was thin, as the price range buyers regarded as acceptable was $720-730/t, according to Mysteel’s tracking.
Source:Mysteel Global
