China's steel exports stay strong on subdued domestic demand

China's exports of both semi-finished and finished steel remained high last week, though trading had already cooled from the first week of this month. Chinese steel prices are still among the lowest in the global market, the factor delivering the boost to export business, according to Mysteel's weekly report.

As of March 25, China's export price of SS400 4.75mm hot-rolled coil (HRC) was assessed by Mysteel at $859/tonne, up for the second week by another $13/t on week.

In the meantime, the prevailing transaction price of SPCC 1.0mm cold-rolled coil (CRC) price also increased mildly by $5/t on week to $937/t as of last Friday, according to Mysteel's assessment. Both prices are in terms of FOB at North China's Tianjin port.

"Many major domestic steelmakers have signed deals for exports," a Shanghai-based analyst of HRC and CRC stated. "This is part of the reason why they can still hold onto their prices, both domestically and in export markets, although at the moment, domestic demand is being seriously dampened by the COVID-19 resurgence," she said.

Though finished steel items remain the main steel products that China usually exports, these aren't the only products enjoying an overseas lift right now. China's exports of semi-finished products have increased significantly too, thanks to the widening price disparity between China and overseas, the weekly report noted.

Mysteel tracked that over the past week alone, exports of carbon steel slabs by a few major steelmakers amounted to over 300,000 tonnes. This compares with last year's full-year record where China's exports of steel semis including both carbon and alloy semis totaled only 35,997 tonnes, according to Customs statistics.

"The price gap between the Chinese steel market and those abroad continues to expand - some have even hit historical highs - due to a global shortage of steel products, especially of preliminary steel products as a result of the Russia-Ukraine conflict," another Shanghai-based industry source observed.

For steel billets, for example, by the end of last week the price gap between those in China's Tangshan city, a major billet supply base in North China's Hebei province, and the CFR import price in the ASEAN market, a major destination for China's steel exports, had reached $143/t, she noted.

Written by Olivia Zhang, zhangwd@mysteel.com

This article has been published under an article exchange agreement between Mysteel Global and SteelMint.