China’s export prices for carbon steel (CRC) and galvanized steel (GI) rose sharply last week after Beijing’s decision to end the 13% tax break for them from August 1, according to the latest weekly report from Mysteel.
According to a Shanghai-based analyst, mills and traders were quick to respond to the central government’s announcement of July 29 rebates, and all of the cost increases associated with this change have already been added to their bid prices.
“Despite this, some buyers still find the prices reasonable and some (export orders) are still under discussion,” she said.
As of July 30, the CRC export price from Japan averaged $ 1,120 per tonne on FOB terms, while the Russian CRC price was $ 1,040 per tonne on FOB terms. The bid price for products from Japan and South Korea was about $ 1,300 per tonne on FOB terms.
Market sources note that while Chinese steel exports remain generally price competitive, export volumes are declining. This is due to the fact that Chinese mills are less interested in exports, as well as due to falling demand for Chinese steel in major countries such as ASEAN.
“All major domestic steel mills have adjusted their export targets to better meet domestic demand,” said a second market insider from Shanghai.
A major manufacturer from eastern China confirmed this, saying that its company has cut its planned export volumes for the remaining months of this year.
On the other hand, the rise in COVID-19 cases in Southeast Asia has significantly reduced demand.
With the number of new infections on the rise, the Vietnamese capital Hanoi has introduced new quarantine measures since July 24, and a third of the country’s roughly 100 million population is now subject to a ban.
“COVID-19 cases in ASEAN are driving down demand for steel. Vietnamese buyers want to postpone the supply of steel, for which they have already signed contracts, due to restrictions, “- also said an industry source from India.