Chinese
domestic steel price hike and RMB appreciation are followed by the rise in
Chinese steel export quotation. As SteelHome knows, steelmakers quote
SAE1008 6.5mm wire rod at 520 US dollars per ton (FOB), a rise of 15
dollars over pre-holiday level; quote SS400 3-12mm HRC at 510-520 US
dollars per ton (FOB), a rise of 5-15 dollars per ton; quote DX51D 1.0mm
HDG at 625 dollars per ton (FOB), a rise of 10 dollars per ton.
Coupled
with strong demand, Chinese local steelmakers are bullish on the market
and raise the quotation. Moreover, RMB valuation makes another driver for
steel export rise. According to Bank of China, RMB exchange rate against
US dollars on October 13 was 6.7, a valuation of 0.68 percent over
September 30 and even a sharp appreciation of 6 percent over June 1. In
other word, HRC export price, if other conditions are unchanged, rises 4
dollars over September 30, or even rises 30 dollars over June 1. The
valuation of RMB drags down Chinese steel export’s competitiveness and
pushes up international price as well.
One
steel exporting company tells SteelHome that steel buyers in Southeast
Asian nations currently prefer to buying locally produced steel products,
citing that the pandemic adds uncertainties to market. Another exporting
body introduces that buyers from American regions remain active as they
are resuming manufacturing activities which were halted in the first half
year.
As
per data released by Customs of China, steel export in September was 3.828
million tons, steel import was 2.885 million tons, generating 0.943
million tons of net export in the month. The net export hit record low of
2020. The high import in September is ascribed to contracts largely signed
in June and July when international market was competitively priced.
However, the rise in international market has cooled the bookings of
Chinese buyers, which will be proved by October or November import data,
to be released by the government department. Thereafter, net export will
climb up again.
Table:
China Monthly Steel Import and Export in 2020
Quantity
in 10,000 tons
Steel
|
Jan-Feb
|
Mar
|
Apr
|
May
|
Jun
|
Jul
|
Aug
|
Sept
|
Imp
|
204.1
|
113.7
|
100.6
|
128
|
187.8
|
260.6
|
224
|
288.5
|
Exp
|
781.1
|
647.6
|
631.9
|
440.1
|
370.1
|
417.6
|
367.8
|
382.8
|
Net exp
|
577
|
533.9
|
531.3
|
312.1
|
182.3
|
157
|
143.8
|
94.3
|
Source: Customs of China, SteelHome Database |
(To contact the reporter on this story: tina.tong@steelhome.cn or 86-21-50585733 15800777957) |