Steel exports from China have been very low lately, both because steel mills are reluctant to sell overseas and because overseas buyers are also holding back, worried about new export duties.
The central government’s removal of export duties of 13% on 23 additional steel products only took effect August 1, a Beijing-based steel trader said. “Buyers need time to come to terms with this price spike (and) there is also talk of new export duties coming soon,” he said, explaining the recent lull in the export market.
On the sellers’ side, Chinese steel mills are also less willing to place new export orders due to many factors, including supply constraints, shipping uncertainties and risks of new taxes, he said.
An industrial source in Shanghai also noted that there are now fewer offers from steel mills, “and very limited resources for export.”
Mysteel Global notes that steelmakers across the country have been cutting production one by one since July in response to Beijing’s call to cut steel production this year as part of its emission reduction measures.
“With production cutbacks, steelmakers will first guarantee supplies to their long-term (domestic) customers,” a Beijing-based trader said, adding that mills would rather not submit bids or accept small export orders.
Last Thursday, the China Metallurgy and Steel Association advised its steelmakers to avoid exporting conventional steel products or, if they must, export as little as possible, according to Mysteel Global. Market sources point out that some of the big players are listening to the CISA’s call.
Due to the lack of steel products of Chinese origin in international markets, other countries have increased their share in exports, said a second market observer from Beijing.
“Since early August, Indian steel mills have exported large quantities of hot rolled coils to North Africa, the Middle East, Central and South America,” he said, stating that the export price for the SAE1006 HRC of Indian origin was $ 955 apiece. t CFR to Turkey.
Last week, Mysteel estimates the Chinese export price for the SS400 4.75mm HRC fell $ 8 /t to $ 926 /t on FOB terms from the northern Chinese port of Tianjin. Chinese-made 1.0mm SPCC cold rolled coil price also dropped $ 5 /t over the week to $ 1,014 /t on FOB terms from Tianjin Port.