China's recent export rebate adjustment has not had any substantial positive impact on the country's exports of flat rolled products. Meanwhile, following the previous rise in import prices, there were only a few takers in the import market over the past week. Currently, China's imports and exports of flat rolled products indicate a general stagnation.
On the export side, quotations of Chinese HRC have remained constant in the past week, with CRC offers also moving on a stable trend. At present, Chinese traders are offering common carbon HRC in the range of $480-500/mt FOB, while 1.0 mm CRC export quotations are stable at $540-550/mt.
After China's recent announcement of an increase in its export rebate for certain steel products, many trading companies studied the changes carefully hoping to find a way of enhancing the competitiveness of their export prices and of boosting their profits. However, since alloyed HRC is not included in the rebate category, many traders remain helpless in terms of export activity as current price levels are too high for the international market.
Due to the uncompetitive prices of Chinese hot rolled coils, Dongbu Steel, Union Steel, Hyandai Hysco and other South Korean cold rolled producers are likely to stop importing Chinese HR products.
According to the latest figures, HR imports by South Korea rallied significantly in March, hitting a new high for the current year at 362,330 mt, of which imports from Japan accounted for 252,525 mt or 69 percent of the total, while Chinese imports totaled only 39,455 mt. Imports of Japanese materials were in particular boosted by competitiveness as regards both price and quality. In March, the average import price of Japanese HRC to South Korea stood at $601/mt, while that of Chinese materials was $689/mt.
On the import side, CIS origin hot rolled products are being offered at $380-390/mt CFR China's major ports, with import quotations of ex-CIS CRC remaining at $450-460/mt CFR China's major ports.
Many Chinese purchasers currently state that, given the sluggish domestic market, they are not able to afford the price increases seen in overseas supplies. The level they are willing to accept for ex-CIS CRC is around $420/mt CFR.
In addition, 2.0 mm SPHC HRC quotations from Japan are down $50/mt to $400/mt CFR, while 1.0 mm CRC from Japan is now offered at $440/mt CFR, down $40/mt week on week.