Export prices for Chinese plate rose in the past week despite a weakening domestic market, with exporters coming under pressure to keep their offers high amid a weakening dollar.
Fastmarkets’ price assessment for November Chinese plate export, fob China main port, was $515-520 per tonne for the week ended Tuesday September 15, up by $5 per tonne from $510-515 per tonne fob a week earlier.
A Zhejiang-based trader said he had heard about a domestic trading house buying small quantities of plate of undisclosed specifications from a mill in northern China based on a base price of $515 per tonne fob for A36 grade. The trading house is looking to sell these to South America, he said.
The transaction was also the lowest achievable price in the Chinese market in the past week, the trader added.
*** Weakening dollar
A trader based in Jiangsu province agreed, saying most mills were firm with their high offers due to a weakening dollar despite thinning domestic trading activity in the past week. The exchange rate was 6.7825 yuan to $1 on Wednesday, down from 6.8319 yuan to $1 on September 3, according to China’s State Administration of Foreign Exchange. “Export trading activity for plate was thin in the past week, but I think there is little reason for mills to cut export prices significantly if the dollar has fallen by so much,” the Jiangsu-based trader said.
“I’ve heard that some buyers in Southeast Asia are bidding at only around $500 per tonne fob China, but that is impossible for Chinese mills to accept now that the dollar has weakened by that much. “But mills might cut their [export] prices in the next few weeks if the domestic market continues to weaken,” he said. Fastmarkets’ weekly price assessment for steel plate domestic, delivered whs eastern China was 3,940-3,960 yuan ($581-584) per tonne last Friday, down by 30-70 yuan per tonne from 3,970-4,030 yuan per tonne the week prior.
*** Hot-rolled coil
A trader in Anhui province said domestic plate demand had weakened recently amid a downtrend for the flat steel products, especially hot-rolled coil.
“Many buyers are taking a wait-and-see approach after HRC futures kept falling recently in anticipation for lower plate prices in the next few days,” he said.
The most-traded January HRC futures contract on the Shanghai Futures Exchange closed at 3,779 yuan per tonne last Friday September 11, down by 131 yuan per tonne week on week. A source at a second mill in northern China said it was planning to offer its product at $525 per tonne fob this week, down by $5 per tonne from $530 per tonne fob a week earlier.
“I don’t think we will make big cuts to our export offers since the US dollar is depreciating, but we are being forced to seek out more deals from abroad due to the weakening of the domestic market.
“As such, we will try to implement a small cut of $5 per tonne in our export offers this week, a relatively small cut, to see whether that will help us generate more orders,” he said.
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