China's steel exports are weakening, while imports are rising

China's steel export market remained tepid last week, even as the price gap between Chinese sellers and their main competitors narrowed. On the contrary, China's interest in imports, especially wire rod, has become more active, traders' sources say.

Chinese steel export prices declined sharply last week, with the price of SS400 4.75mm (HRC) hot-rolled steel declining by $8 per ton over the week to $931 per ton FOB from the northern Chinese port of Tianjin as of October 15.

According to Mysteel, the export price of 1.0mm SPCC cold-rolled steel (CRC) also decreased by $5 per ton over the week to $1,026 per ton on FOB terms from Tianjin Port.

By comparison, export prices for steel offered by China's main competitors rose last week, while exporters in India, for example, raised their prices in response to a reduction in local coal supplies.

For example, the offer price of Indian HRC of the same SS400 brand increased by $10 per ton per week to $840 per ton on FOB terms from India as of October 15, an Indian industry source confirmed.

The movement of global prices in the opposite direction helped to narrow the price gap between Chinese exporters and their competitors, but overall the export business remained very weak.

"(Chinese) prices are still unsuitable, and as winter approaches, demand is also weakening," commented a steel exporter from Eastern China.

But although export demand for Chinese steel remained low last week, the interest of Chinese traders and end-users in steel imports was positive, especially for wire rod imports, the sources said. This reflects a reduction in domestic supplies and higher prices for long positions as a result of limited industrial capacity, especially affected by the production of electric arc furnaces and rolling rolls.

Last week, the offered prices for wire rod from India, Turkey, Indonesia and Vietnam ranged from 720-820 dollars per ton CFR China, which allowed Chinese importers to make high profits. For comparison, as of October 15, the average domestic price of the HPB300 8mm was 6,130 yuan per ton ($956.3 per ton), including 13% VAT, according to Mysteel estimates.