Posted on 15 Dec 2021
So far this month, China's steel export trading has been less active than in November as end-users and importers overseas are preparing for the upcoming Christmas and New Year holidays, Chinese sources said on December 14.
"My clients are wrapping up their work for this year," an official with a major steel foreign trade company in East China's Zhejiang said. "Most had already completed steel procurement for the year by November, so now only those who did not buy enough or who intend to grab a bargain are still looking for buying opportunities," she explained.
Her clients will probably stop work at the end of this week for Christmas holiday celebrations, she added.
A market observer based in Beijing is experiencing a similar slowdown. "I've only heard a few deals involving small volumes were concluded recently. Overseas market demand is weak, due to the Christmas holiday, as well as increasing COVID-19 cases in many countries," he said.
In the ASEAN region - a key destination for Chinese steel exports - manufacturers are not able to operate at full capacity because of lockdown measures and supply-chain disruptions, according to him.
Nevertheless, the prices of Chinese steel exports remain firm and continue to be competitive in the international trading market, both sources agreed.
Mysteel's assessment showed that as of December 10, the prevailing transaction price of SS400 4.75mm hot-rolled coil (HRC) and SPCC 1.0mm cold-rolled coil (CRC) were unchanged on week at $772/tonne and $864/t respectively, both in terms of FOB from North China's Tianjin port.
In general, Chinese steel producers' willingness to sell abroad is still high at the moment, as selling to overseas customers is slightly more profitable than selling domestically, the Zhejiang exporter observed.
In comparison with export prices, as of December 10 China's national price of Q235 4.75mm HRC was Yuan 4,794/t ($752.6/t) including the 13% VAT, down Yuan 15/t on week, according to Mysteel's assessment.
"Some mills will be relying on exports to digest their stocks," the Zhejiang exporter indicated, explaining another reason for mills' willingness to chase foreign buyers.
The deals Chinese mills have signed now are mostly for next January-February shipment, the months when domestic steel demand will be stagnated due to the Chinese New Year holiday over January 31-February 6, Mysteel Global noted.
Source:Mysteel Global
