Posted on 08 Dec 2021
Chinese steel export prices declined last week despite the pickup in domestic spot market prices. The robust export transactions and inquiries seen last month also cooled slightly in the first week of this month, market sources said.
As of December 3, the transaction price of Chinese SS400 4.75mm hot-rolled coil (HRC) had reversed down $10/tonne on week to $772/t and that of SPCC 1.0mm cold-rolled coil (CRC) had also declined $7/t on week to $864/t, according to Mysteel's assessment. Both prices are in terms of FOB at North China's Tianjin port.
"Tradable export prices retreated mainly due to weakening demand in the ASEAN region, even though domestic prices have been slowly rebounding," an industry source based in Shanghai observed. ASEAN is China's top steel export destination, Mysteel Global noted.
In the domestic market, the spot price of Q235 4.75mm HRC assessed by Mysteel had increased for the second week as of December 3, up another Yuan 12/tonne ($1.9/t) on week to Yuan 4,809/t including the 13% VAT.
In comparison, however, the prevailing import price of the SS400 4.75mm HRC in ASEAN had slumped $45/t on week to $770/t CFR, according to Mysteel's tracking.
In the first week of this month, export trading of cold-rolled products and downstream derivatives such as galvanized steel and color-coated sheets had slowed from November, though HRC transactions remained generally active, according to Mysteel's tracking.
The falloff in trading activity may be because Chinese steelmakers these days have less interest in exporting, a mill official based in Tianjin suggested, but could also reflect weakening overseas demand, he noted.
"We are starting to prepare for the Chinese New Year holiday (starting February 1) and making arrangements for production and sales for next year, so we are not really into accepting a lot of orders around this time," he said. His company mainly exports galvanized and color-coated sheets.
He added that at present, industrial production in general in the North China region is being restricted to reduce air pollution in preparation for the Winter Olympic Games to be held in Beijing and Zhangjiakou starting February 4.
The restrictions, which will probably last until late February, are also a reason for steelmakers in the region not to accept too many export orders over the period.
On the other hand, weakening overseas demand around the Christmas holiday, as well as the worsening pandemic situation, have been negatively affecting steel procurement among end-users too, the official confirmed.
Source:Mysteel Global
