Sluggish exports, rising imports and high inventories still weigh heavily on China's steel market although the price increasing in Shanghai Futures Exchange recently, this is according Mr Guo Yong, an analyst at Jinrui Futures. Steel prices will be limited by output in the long term.
Compared with other countries, China's steel price is much cheaper at present due its huge output. As reported, Chinese origin rebar is priced at USD 477 per tonne while American rebar is USD 544 per tonne with Japanese rebar at USD 706 per tonne. For medium plate and hot rolled steel coil, China is priced as USD 477 per tonne with the US and EU at USD 544 per tonne and USD 706 per tonne respectively.
However, the relatively low price cannot promote steel exports but brings instead, many buyers' restrictions as for the fear of impact on their own domestic steel industries. Therefore, most foreign countries havejoined to launch a series of antidumping lawsuits on Chinese steel products. Meanwhile, the CISA announced that China's crude steel output in March was at 42.08 million tonnes up by 4.11% month-on-month. By comparison, exports in Q1 fell sharply with imported steel products somewhat higher.
According to statistics from Chinese Customs on April 10th, export volumes in March were 1.67 million tonnes, a drop of 54.8% year-on-year. Imports jumped to 1.27 million tonnes up by 15.33% year-on-year. Steel billet exports in March were zero while imports were 0.46 billion tonnes in March and 0.9 million tonnes for Q1 - up1700% year-on-year.
As per the statistics from http://www.steel-futures.cn, the inventories of long products and steel slab for the second week of April in Chinese key cities reached 4.8404 million tonnes and 5.1174 million tonnes, down by 0.2899 million tonnes and up 0.0243 million tonnes week-on-week respectively. The market inventory for common carbon steel products was reported to be 9.9578 million tonnes down by 2.6% from the previous week.
Mr Guo Yong notes that "China is not likely to cap output citing its important tasks of sustaining GDP and employment." Steel prices are fluctuating as a result.
Source: Steel Guru
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