Rise in China's steel export prices takes a pause

The continuous rise in export prices of Chinese steel since late February from the end of the Chinese New Year holiday have lost momentum in recent two days, market sources say. The strong wait-to-see sentiment pervading the market has led export trading to stall almost completely, they observed.

On March 10, the export price of SS400 4.75mm hot-rolled coil (HRC) at North China's Tianjin port assessed by Mysteel stood at $721/tonne FOB, unchanged on day, after having gained over $80/t since late February. HRC is one of the major steel products that China exports.

"There's no trade at all, not even inquiries," a steel exporter based in East China's Jiangsu province complained on Thursday. "Actually, we are not expecting any deals either, as both we and the buyers are trying to figure out the future price direction," he said frankly.

Behind the uncertainty are the recent declines in China's domestic steel market, the softening of raw materials prices in the international steel market, and the fervent speculation about whether and when Beijing may introduce cuts to the tax rebates Chinese exporters enjoy, according to him.

Domestically, China's national average price of Q235 4.75mm HRC declined for the second day on Wednesday, losing another Yuan 45/t on day to reach Yuan 4,895/t ($753/t) including the 13% VAT, as domestic trading - though steadily recovering after the CNY - is yet to experience the boom that market insiders had widely expected.

As for raw materials, international steel scrap prices have shown signs of weakening too, Mysteel Global noted. For example, Japan, the world's second largest steel scrap exporting country, saw its domestic steel scrap prices plummet by Yen 1,500-2,000/tonne ($13.8-18.4/t) from last Friday to Yen 41,000-41,500/t as of Thursday morning, as Mysteel Global reported.

A steel user based in Taiwan expressed the wariness many overseas steel buyers are feeling. "We've decided to wait for a while (to buy steel), as steel scrap prices may possibly decline further," he said.

Written by Olivia Zhang, zhangwd@mysteel.com

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