Chinese steel export prices up on Yuan appreciation

China's steel export sales continued increasing for a second week over October 10-16 mainly because shippers were responding to the appreciation of Yuan against the US dollar. But Chinese steel suppliers still showed little willingness to export while they focus on domestic sales, with the result that steel export contracts concluded last week were limited, according to Mysteel's latest weekly report.

On October 16, the value of the Chinese currency against the US dollar hit an 18-month high of 6.7, which prompted traders to further increase their dollar-denominated FOB prices to compensate.

Over October 10-16, the export price of SS400 4.75mm hot-rolled coil (HRC) assessed by Mysteel increased by another $2/tonne on the week to $511/t FOB North China's Tianjin port as of October 16. The price of B500B 18-25mm rebar also moved up $2/t on the week to $484/t FOB at East China's Zhangjiagang port.

"The Chinese mills and traders are now mainly taking orders for December shipment, a period when some (foreign) traders deem the price movement will be weak, so there is a gap between sellers' offers and buyers' bids," a Beijing-based market source commented. Last week, only a few orders for small quantities of HRC were heard concluded with buyers in ASEAN, Pakistan and South Africa, according to Mysteel's tracker.

As for rebar, the appetite of Chinese shippers for placing quantities abroad remained low last week, given the rather firm demand at home, with some mills even ceasing to provide offers. Barely a deal was concluded over last week, Mysteel Global heard. Yet, as the cold winter days are close by and steel demand in Northeast China will gradually come to a halt, the willingness of steel mills there to export may strengthen, the report pointed out.

On the other hand, the stronger Yuan has helped Chinese buyers to become active steel importers, with the uptick at the end of China's National Day holiday over October 1-8 being sustained last week. With global steel demand and trading gradually picking up, international suppliers have become more active. Billets from the Middle East and ASEAN for December shipment were generally traded at $440-445/t CFR China.

Mysteel has heard that last week, a consignment of around 25,000 t of 5SP 160mm square billets from Bangladesh steelmaker GPH Ispat was sold to China at $430/t CFR China, to be delivered in the first week of November. This was the first time the country had sold steel semis in such a large volume.

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