Chinese steel products are losing their competitive edge compared with products from Russia or South Korea.
China's steel export was impacted by the policies from US and EU and at the same time, low-priced steel products from Ukraine, Russia and South Korea weighed heavily on China.
About 0.3 million tonnes low priced HRC from Ukraine was imported into China in February.
According to industry experts the import quotation of HRC from Russia and Ukraine in March surged to USD 320 per tonne while the price in China's domestic market stood as high as CNY 3150 per tonne which means the price difference has widened above CNY 1000 per tonne.
One industry added "However, Chinese steel industry was only impacted a little by such low priced imported cargos owing to the small amount of volume. The volume took up 5% of China's monthly HRC production of 6.0117 million tonnes in November 2008. But some relative experts consider those imported resources is becoming the main driver behind Chinese export drop. At present, Turkish HRC quotation is lower than a Chinese one to Middle East.”
One expert said that in order to cut inventory, global steelmakers have started to slash their export prices though currency depreciation is also a factor. So far, all Chinese steel products have lost their price competitiveness except steel tubes. Some prices abroad are still lower than Chinese prices even after the export rebate increase from April 1st.
Mr Liu Yuan said the root of the price fluctuation dates back to soft demand. Currently the larger steel consumption industries such as real estate, auto and ship building industries, remain gloomy. Takeing South Korea as a benchmark its top three shipbuilding enterprises have received no orders since February. The same applies to China although it adjusted its export rebate for 23 steel precuts on April 1st. However, the effect has been quite limited amid a sluggish market.
Source: China Metallurgical News via Steel Guru
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