.jpg)
Prices of key Chinese steel exports have fallen to record lows, as a supply overhang and slowing domestic demand are making sellers slash prices in a race to the bottom, according pricing data published by Platts, a leading global provider of energy, petrochemicals, metals and agriculture information.
The interest rate cut announced by the central bank over the weekend, the fourth since November, gave little support to Chinese steel prices on Monday.
Steel prices continue to face downward pressures with production staying elevated and competition among Chinese steelmakers for overseas markets intensifying. This is compounded by traders engaged in short selling as they bet on further price declines, and a flaccid outlook for iron ore prices, that have emboldened steel buyers into bargaining hard in negotiations.
"As ongoing anti-dumping investigations threaten to reduce the number of export destinations for Chinese steel in the coming months, we may see the price war intensify, or finally broader production cuts implemented," said Keith Tan, Managing Editor, Steel and Raw Materials at Platts.
Platts Asian steel assessments (FOB China basis) show export prices of two key steel products to have fallen to multi-year lows:
- Hot rolled coil (HRC) prices have fallen to a record low of $339/metric ton FOB China, down 5% month-on-month and 33% year-on-year. Platts has assessed HRC prices since January 2006 on a weekly basis, and increased the frequency of HRC assessment to a daily basis since June 1, 2015. Chinese domestic prices in Shanghai on an ex-stock basis are at Yuan 2,255/mt, down 6% month-on-month and 33% year-on-year, Platts data show. HRC is a flat steel product that goes into making everything from roof sheeting to household appliances and automobiles. The price has not risen since May 7.
- Rebar is also at a historical low of $311.50/mt FOB China, down 7% month-on-month and 30% year-on-year. The price has not risen since April 30. Chinese domestic prices on an ex-stock Beijing basis at Yuan 2,115/mt are down 6% month-on-month and 32% year-on-year, according to ebar, or reinforcement bar, is a long steel product that underpins the construction industry.
