SteelOrbis Shanghai
The macro-control curbed the demand on steel products. Sources reported that
China would reduce the export tax rebate rate of steel products from 11% to 8%. The continuous bearish Southeast Asian steel market also restricts the
distribution of Chinese steel products on the export side.
China will further tighten the money supply, control the overheated economy, and curb the excessive growth in fixed asset investment, and maybe increase the interest rates further. People familiar with
China Banking Regulatory Commission said that there are many problems with the investment-fueled economic growth. It is forecasted that the Central Bank is likely to continuously hike the deposit rate, and meanwhile maintain the slow appreciation for RMB. With the macro-control measures one by one, it is quite hard for the steel price to warm up. Furthermore, the antidumping investigations initiated by
Indonesia and
Australia against Chinese products have also hit the exports.
With the continuous execution of macro-control measures, the market players are not optimistic about the steel exports. In addition, the bearish market demand and the lack of confidence of traders will have some impact on the steel price trend in short term. It is estimated that the flat rolled prices will maintain the downward trend in short term.
The margin of decline was very large for Chinese flat products last week. On July 10, the average price quotation of 5.75 mm x 1,500 mm x C SS400 hot rolled coil was down RMB 337/mt ($42) at RMB 3,790/mt ($474), and that of 2.75 mm x 1,250 mm x C Q235B was down RMB 253/mt ($32) at RMB 4,300/mt ($538). The average price of imported 2.0 mm x 1,250 mm x C 08YU was down RMB 175/mt ($22) at RMB 4,450/mt ($557).
Meanwhile, the average price of 1.0 mm x 1,250 mm x 2,500 mm ST12 cold rolled sheet was down RMB 117/mt ($15) at RMB 5,200/mt ($651), and that of 1.0 mm x 1,250 mm x C ST12 was down RMB 100/mt ($12) at RMB 5,150/mt ($645). The average price of imported 0.6 mm x 1,250 mm x C 08YU remained constant at RMB 5,217/mt ($653).
Some steel mills lacking strength have put some new cold rolled lines into operation. As they did not have smooth marketing channels, good product structure and quality and favorable external relationship, their product prices decreased by a large margin in the market. For example, on July 10, the average price of 1.0 mm x 1,250 mm x C from Maanshan Steel decreased by RMB 180/mt ($22) week on week to RMB 4,850/mt ($607), and that from Handan Steel decreased by RMB 180/mt ($22) to RMB 4,700/mt ($588).
On the hot rolled side, quite sluggish trade volume panicked many traders, speeding up the price decline throughout the week. Nevertheless, there are still some traders who do not accept the current market prices and refuse to sell at a low price level. Some traders have even tried to slightly pull the prices up last week, but they were overwhelmed by the panic mood in the market.
The rapid decline in hot rolled prices has also made a great shock in the cold rolled market. The good news that some steel mills hiked their ex-factory prices did not help the market prices stop declining. Last week,
Angang hiked its cold rolled prices by RMB 0-50/mt, and its current deal prices of 1.0 mm ST12 reached RMB 4,630/mt ($579.5), excluding 17 percent value-added tax.