October 12, 2008
Summary of Chinese steel export prices
Chinese domestic steel market prices are still on the rise except rebar and wire rod. Most steel prices are going to remain at high level in May 2008 and this is also the case with export offers. Despite the continuous rise in prices, it is worthwhile to pay attention to the possible downward adjustment in end of May 2008 or June 2008.
Rebar and Wire rod
Construction steel market has been flourishing in China since February 2008. While export tonnages also see rebound. However, domestic prices see evident decrease today following the swift increase. The market is likely to start its correction in the short term.
On Shanghai market, HRB335 20mm rebar with exemption from Inspection is being offered at CNY 5340 to CNY 5350 per tonne, while those common products are only tagged at CNY 5220 to CNY 5240 per tonne, down by CNY 150 per tonne from peak levels. HRB400 rebar price go down by CNY 100 per tonne to CNY 5530 to CNY 5550 per tonne. Commercial and hi speed wire rod goes remain flat at CNY 5670 per tonne and CNY 5760 per tonne respectively.
Taking Shanghai price for HRB335 20mm as benchmark, it is going to see further downward adjustment unless it could exceed CNY 5500 per tonne. However, the strength above CNY 4900 per tonne would hint that any drop is merely adjustment.
Export offer for rebar is about USD 950 to 960 per tonne and that for wire rod goes at USD 970 to USD 980 per tonne FOB. Sources say that rebar with vanadium is normally being concluded at USD 920 per tonne FOB, but there is almost no transaction for common products. Contract price for wire rod is about USD 940 per tonne FOB.
HRC
Hot rolled steel coil prices will continue to move up on in China and the increase is expected to maintain for at least four weeks. HRC prices are expected to increase on seven consecutive months.
On Shanghai market, commercial 4.75 to 11.5mm*1500mm HRC is being offered at CNY 5650 to 5680 per tonne, 1800mm wide material at CNY 5900 per tonne. Low alloyed 7.5mm HRC goes at CNY 5750 per tonne, while 11.5mm thick HRC has jumped to CNY 6000 per tonne.
Taking Shanghai price for commodity grade 4.75 to 11.5mm*1500mm HRC as benchmark, it is going to approach CNY 6000 per tonne as long as it remains above CNY 5500 per tonne.
Export prices are also bullish at moment. Prevailing offers for commercial thick gauge hot rolled steel coil are at USUSD 930 to USD 950 per tonne FOB and some even have jumped to USD 960 to USD 980 per tonne FOB. There is strong likelihood that quotations are going to reach about USD 1000 per tonne fob if domestic price rise to CNY 6000 per tonne.
Steel Plate
Steel plate export market is still quite strong in China and prices are expected to keep at a high level this month. The strong demand and high cost are bolstering the upward trend and it is not going to alter in the short term.
Chinese domestic plate price is always edging up steadily, though by small range. On Shanghai market, 16mm plate by Yingkou Steel is being quoted at CNY 6430 per tonne, which compares with CNY 6200 per tonne for similar products by tier two producers. Low alloyed 40mm plate goes at CNY 6950 per tonne.
Quotation for commercial plate by tier two steelmakers is at about USD 1130 to USD 1150 per tonne FOB, up by USD 30 to USD 40 per tonne than late April 2008. By comparison, that by tier one steel producer is around USD 1180 to FOB 1220 per tonne FOB.
Though transaction is not ideal, steel makers are still confident that prices would continue to go up. Currently, ship plate and high end plates account for most part of steel exports from China due to much higher profits.
CRC
Cold rolled steel coil price are still on the rise in China and the upward trend is expected to continue in May 2008.
On Shanghai market, 1.0mm CR sheet by Anshan Steel is being quoted at CNY 6880 per tonne, 1.2 to 2.0mm sheet CNY 6820 to CNY 6850 per tonne. 1.0 CR coil by Maanshan Steel goes at CNY 6780 per tonne.
As forecast in previous reports, 1.0 CR sheet by Anshan Steel has reached CNY 6800 to CNY 7000 per tonne. If it could keep above CNY 6800 per tonne, the next target would be CNY 7200 per tonne. Export offers for CRC have also been raised accordingly. That for 1.0mm cold rolled coil is prevailing at USD 1020 per tonne FOB, up by USD 20 per tonne from late April 2008.
Some traders are worried that prices are going to drop after such a great increase. However, there has been no evident signal of correction in the short term. The strength is expected to maintain for another 4 to 6 weeks.
