The export market for Chinese flat rolled products has remained sluggish, with a continuous decrease observed in quotations, which still appear unattractive to the international markets. Meanwhile, China's import market for flats has been quite active, though with confusion seen as regards market quotations.
On the export side, the current mainstream quotations of cold rolled coils from the leading Chinese mills are around $570-580/mt FOB, while the mainstream HRC export quotations stand at $460/mt. In addition, a high quotation level of $500/mt FOB has also been seen in the hot rolled market, while some individual mills are offering HR products at $425-430/mt CFR South Korea for the purpose of relieving their heavy stockpiles.
On the import side, quotations for materials from South Korea and Russia are frequently heard. Over the past week, hot rolled quotations from South Korean producer POSCO to China have remained at $410-420/mt CFR.
Russian steelmaker MMK has lately been offering CRC to China at $440-430/mt CFR, with its HRC offered at $385-380/mt CFR. It is heard that MMK has sold out all materials for May shipment.
Faced with the strong arrivals of imported materials, some domestic traders are worried about the impact of low-priced supplies on the domestic market. However, since the flat rolled imports mainly consist of thin specifications and will flow directly to downstream cold rolled or galvanized producers, they will not generate much impact on the domestic spot market.
As regards the export rebate adjustment, the Chinese government has decided to raise the export rebate for some steel products as of April 1, 2009; however, a detailed announcement has not yet been released.
Currently, there are many rumors in the market regarding the imminent export rebate adjustment. The most persistent are that the rebate for HRC will remain at zero or be increased to 13 percent, while the rebate for CRC will be increased from five percent to 13 or 17 percent.