International Steel Market Daily: China’s Steel Prices Remain Stable, With No Improvement in The Number Of Newly Signed Export Orders

Today, China’s steel prices are generally stable. As of press release, the mainstream spot hot coil price for Q235 in Shanghai is 3930 yuan/ton (539 US dollars), indicating a slight lack of market confidence.
In terms of exports, currently, the export prices of ordinary coils from large steel mills in the north are higher than 550 US dollars/ton FOB, and the markup for SAE1006 material hot coils is between 15 and 20 US dollars, with very limited counteroffer space. The main factor is that the high price of iron ore has led to a significant increase in production costs for Chinese steel mills. Steel mills have a weak willingness to reduce prices to promote exports. Currently, the number of new orders signed for January shipment exports is still relatively small, and a few steel mills can still sell December shipment orders.
From an overseas perspective, some Southeast Asian and Indian buyers are waiting for Formosa Plastics Hejing to release the delivery price for January hot rolls, so they are not in a hurry to purchase China’s high priced resources. In terms of the Black Sea, due to the fact that Russian steel mills generally own their own mines, production costs are controllable. Recently, the quotation for Russian SAE1006 hot coils is at $565/ton FOB Black Sea, which is almost the same as China’s resource prices. However, due to the influence of origin and payment methods, only a few Middle Eastern countries purchase. On the US side, the upward trend of steel prices remains unchanged, with mainstream hot coil prices exceeding $1000 per ton. The three major car companies that previously went on strike have resumed procurement, and the willingness of American steel mills and large processing centers to raise prices has increased. Local steel prices still have room to rise.