Posted on 29 Oct 2021
China's imports of semi-finished steel have slackened lately with the recent steep falls in domestic steel prices amid the tepid domestic demand, market sources say.
As of October 27, the price of Q235 150mm square billet in Tangshan, North China, had fallen steadily by a total of Yuan 430/tonne ($67.2/t) from the recent peak reached on October 11 to Yuan 4,900/t EXW and including the 13% VAT, according to Mysteel's assessment.
Moreover, the market transaction price of the same grade of billet in East China's Jiangsu province, also assessed by Mysteel, had declined by a larger Yuan 560/t from the high on October 11 to Yuan 4,820/t including the 13% VAT. Hebei and Jiangsu are China's top two steel-producing provinces.
"The prices declined too fast. These days we can't sell imported semis anywhere," a steel importer based in East China grumbled.
Rather than looking for more opportunities to import, Chinese traders have been scrambling to shift the semis they booked - but are yet to be shipped - to third countries other than China, according to him.
East China is a key destination for imported semis as many major steel trading companies are based there, while the region is also a major billet consumption hub as well.
A second steel trader with a trading house based in East China's Zhejiang province also noted the slackening of importing and trading activity recently. "Billet sales here are stagnated (so) all we can do is wait for opportunities," he said.
The falloff in trading in East China is mainly due to the operations of steel re-rollers in Jiangsu being suspended, as the provincial government has been rationing power supplies to industrial enterprises there since the middle of September.
Meanwhile, in the Tangshan region, a production ban has been slapped on local steel re-rollers during October 21-31, as Mysteel Global reported.
Rather than focus on East China, overseas sellers are preferring to provide offers to North China where prices are higher, a Shanghai-based market watcher observed. "But even though the sellers have lowered their offers following the falls in China, they are still generally some Yuan 200/t higher than Chinese domestic prices," she said.
According to Mysteel's tracking, offers for 5SP 150mm square billet from ASEAN were at $715/t CFR East China as of October 27, down $3/t on day or $15/t from October 11.
Over January-September, China's imports of steel semis were generally active and totalled 9.4 million tonnes, even though the nine-month total was down 33.9% on year. This was mainly due to the high basis of 2020 when China became the dominant buyer in the global steel market. The country's economy had recovered earlier from the ravages of COVID-19, as reported.
Source:Mysteel Global
