Global steel prices soften but China remains unchallenged

Exclusive

05 December 2016

Global steel prices have soften temporarily after the fast and narrow spread rallies witnessed last 5-7 weeks.

Supported by sudden movement in raw material prices, China had been varying its steel prices randomly which were not being accepted worldwide. There was a strong feeling in the trading community that the recent 2-3 months jinx in commodity and steel markets was a result of China’s defense against the rising restrictions on its exports.

Global raw material suppliers supported the move by cutting output and increasing iron ore price to present day $77-78 per ton and coking coal to $278 per ton (FOB Australia). In spite of this rise, China’s steel prices did not increase in the same range as rest of the world which has allowed it to dump steel into other countries as a lesser price.

China’s current HRC price is at $490-495 per ton whereas in Europe it is at $550 per ton. In China the prices have dropped by $4-5 per ton in the last week while in Europe they have increased by $6-8 per ton in the same week.

Rebar which is used in construction it exported from China at $425 per ton FOB today and billet is traded at $400-405 per ton FOB. The ex-work prices in other countries like India, CIS, Turkey, Indonesia or Europe is at a premium of $10-15 per ton over the FOB price of China without any taxes. This shows that inspite of possessing better competitiveness than China, many countries around the world are unable to compete Chinese steel prices.