China’s steel price advantage is highlighted

“Export orders have maintained a steady growth in the first two months. Southeast Asia, Australia, and Africa are regions with more export orders.” On March 22, a steel foreign trader in Tianjin introduced to the “Securities Daily” reporter that since this year Due to the support of national policies, the business environment for steel export is getting better and better. In addition, the price of sea freight has continued to decline this year, creating better conditions for steel export, and steel export has maintained a growth trend.

In fact, the growth momentum of my country’s steel exports has already appeared at the beginning of the year. According to the latest data from the General Administration of Customs, the national steel export volume in the first two months of this year was 12.19 million tons, a year-on-year increase of 49%.

Many people in the industry believe that the tight supply of international steel products, rising prices, and the prominent price advantage of China’s steel products are the main factors supporting the boom in steel product exports.

The drop in overseas steel output is relatively large

The widening price gap between domestic and foreign

According to Wang Guoqing, director of the Lange Iron and Steel Research Center, in the past three months, the export price of overseas and Chinese hot coils has continued to increase. However, due to the relatively low increase in my country’s export quotations, my country’s steel export prices have obvious advantages.

A person in charge of a listed A-share steel company told the “Securities Daily” reporter, “So far this year, steel export orders have indeed increased a lot compared with last year. On the one hand, as domestic steel prices continue to fall, more exports are conducive to Balance the price difference between domestic and foreign markets; on the other hand, seize the international market and maintain international competitiveness.”

Taking the hot-rolled coil category as an example, the monitoring data of the Lange Iron and Steel Research Center shows that as of March 22, 2023, the export quotations (FOB) of China, India, and Turkey for hot-rolled coils have all increased compared with the same period last year, with an increase of USD 65/ton to USD 150/ton. However, China’s HRC export quotations are about US$65 to US$165 per ton lower than those of the above-mentioned export regions.

Shandong Guanzhou Co., Ltd. is an enterprise that mainly exports color-coated sheets, galvanized sheets, galvanized sheets, cold-rolled sheets and other related products to Russia, the Middle East, South America, Australia and other places. Xu Qingdong, director of the company’s foreign trade department, told ” Securities Daily reporter: “Since the beginning of this year, we have received relatively more export orders, especially in February, where orders have increased significantly, and export destinations are concentrated in the Middle East.”

He further stated that the reasons why export orders were more concentrated in the Middle East in February were, first, domestic steel prices had a wave of correction at that time, and the purchase price was relatively reasonable at that time; second, the Turkish earthquake affected the supply capacity of local steel companies to a certain extent. Indirectly stimulate the increase in my country’s steel export orders; third, due to the Ramadan holiday, some buyers will choose to purchase in advance in February.

Wang Guoqing explained that, judging from the international steel supply situation, the current drop in overseas steel production is relatively large, and the international steel market is showing a downward trend in supply, with my country making up the gap.

According to monitoring data from the Lange Iron and Steel Research Center, in January this year, the output of the rest of the world outside of China was 65.8 million tons, a year-on-year decrease of 10.2%. Among them, the crude steel output of the EU (27 countries) decreased by 15.2% year-on-year, and that of other European countries decreased by 17.5% year-on-year. In addition, crude steel production in Russia and the CIS countries and Ukraine fell by 24.9% year-on-year.

In comparison, my country’s steel output has recovered significantly. From January to February this year, crude steel output was 168.7 million tons, a year-on-year increase of 5.6%.

Export Growth Momentum

or will last until May

“my country’s steel export has maintained a year-on-year growth trend for 10 consecutive months. At present, my country’s steel export price advantage is gradually increasing. In the case of overseas steel supply is still weak, my country’s steel export order index is on the rise.” Wang Guoqing said.

According to the survey data of China Federation of Iron and Steel Logistics Professional Committee, the new export order index of iron and steel enterprises in February this year increased by 2.3 percentage points to 49.8%. 51.5%.

The hot export of steel products has also driven the freight rates of corresponding routes to stop falling and rise. According to data from the Shanghai Shipping Exchange, on March 17, the freight rate for a 20-foot container from Shanghai to Europe was US$878, up 1.5% week-on-week; the freight rate for a 20-foot container from Shanghai to the Mediterranean was US$1,651, up 3.9% week-on-week rose for the first time this year. Meanwhile, the Shanghai-Singapore freight rate for a 20-foot container rebounded to $190, rising for three consecutive weeks.

Mao Lin, an analyst at the steel business group of Shanghai Steel Union, believes that part of the reason is that last year’s export volume was too low (lower than in previous years) and overseas prices rose faster than domestic prices at the end of December, which promoted steel companies’ export orders, resulting in exports in the first two months of this year. Orders received increased by 49% year-on-year. The month-on-month increase was about 10%, mainly due to the heavy export volume in February.

Can such a hot steel export momentum continue? Wang Guoqing predicts that my country’s steel export volume is expected to maintain a high level of around 5 million to 6 million tons in the later period. Therefore, the steel export volume in March and April will still maintain a year-on-year growth trend, but due to the high base after May of the same period last year, it will remain Year-on-year growth is difficult.

Mao Lin also said that after the Spring Festival, my country’s steel export orders continued to be good. Since the beginning of March, most steel mills have entered the May shipping schedule. It is expected that the export volume in March and April will increase further than that in February. Judging from the current order level, the export volume in May will remain at a relatively high level. It is expected that the growth momentum of steel export will continue until May.333965043_896990048204915_4959280240349711964_n (1)

Post time: Mar-27-2023