August 22, 2008

Chinese HRC export offers FOB prices cross USD 700 mark

It is reported that export offer for hot rolled steel coil continue to edge up in China on continuous appreciation in CNY and recovery of international market prices. Most offers are prevailing at USD 705 per tonne to USD 710 per tonne FOB. Steel makers indicate that they have to raise export price due to appreciation in CNY and expectation of higher raw material prices.

A Shanghai based trader said that "We have not prepared to take HRC at USD 710 per tonne FOB up since there are few overseas customers who are willing to buy at the updated price levels."

An export director with a steel producer in North China said that exports do not bring us much more profit than domestic sales and we have to take the risk of the weakness of the US dollar against CNY.

South Korea remains to be an important destination and local traders are raising sales price for Chinese origin HRC. Despite a low season, prices are on the rise, bolstered by rising domestic demand and low inventory level. Sales center with HYSCO plans to shoot up HRC price to KRW 720 per kilogram in February from current level of KRW 670 per kilogram to KRW 680 per kilogram. Hence there is still room for uprise,

At the same time, the export volume to South Korea keeps stable though prices have been surging. The average tonnages stay at 250,000 tonne to 280,000 tonnes per month since last September. The peak level reached 408,000 tonnes in last April and dropped to 253,000 tonnes due to decrease in export tax rebate rate. The robust demand and short supply in South Korea are believed to the major reasons behind it.