Posted on 11 Aug 2020
Although Chinese steel mills continued to raise their export prices over August 1-7, they had no strong intention of selling abroad and were mainly concentrating on satisfying domestic needs, according to Mysteel’s latest weekly report. Chinese steel import and export activity was quiet over the period.
Over the week to August 7, China’s export price of SS400 4.75mm hot-rolled coil assessed by Mysteel increased another $15/tonne on week to $490/t FOB Tianjin port, North China, while that of B500B18-25mm dia rebar also climbed $7/t on week to $476/t FOB Zhangjiagang port in East China’s Jiangsu province.
“Such high prices are not at all competitive in the global steel market, so seldom did we see overseas buyers making any inquiries,” a steel analyst based in Beijing commented.
“Profits from domestic sales are decent, so most mills are focusing on the internal market and care little about export business,” he added, noting that the margins some mills in North China are earning from selling rebar and HRC domestically are as high as Yuan 400/t ($57.5/t).
Currently, steel demand in North China is strong, especially for construction in the Xiong’an New area, a state-level development zone in North China’s Hebei province now entering a key period where the pace of building is speeding-up, the Beijing analyst said.
“When Beijing suffered from heavy rains last week, Xiong’an did not, as they (the related governmental bodies) used certain weather-control techniques –- including the use of cannons – to blow the rain-bearing clouds away to somewhere else,” according to him, such was the determination to avoid disruptions to construction work there.
As for steel imports, Chinese buying of billets became quiet again last week after large quantities of buy orders were concluded over August 1-2, according to a Shanghai-based market watcher.
Billet suppliers from the CIS countries, India and Brazil continued to raise export prices, which further dampened the Chinese buyers’ interest. Yet, induction furnace producers in ASEAN countries such as Vietnam and Malaysia still offered billets at competitive prices, and as of August 7, these IF makers were offering at $425-430/t CFR China while domestically-supplied billet price of the comparative quality stood at an eight-month high of Yuan 3,440/t ($493.8/t) EXW and including the 13% VAT on the same day.
Written by Olivia Zhang, zhangwd@mysteel.com
Edited by Russ McCulloch, russ.mcculloch@mysteel.com
Source:MySteel Global
