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Oct.27.2020 1USD=6.6725RMB
  SteelHome >>Steel>>Market Info>>SteelHome Analysis
 
SteelHome: RMB Appreciation Drags Down Chinese Steel Export

http://en.steelhome.cn [SteelHome] 2020-10-14 15:04:21

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Chinese domestic steel price hike and RMB appreciation are followed by the rise in Chinese steel export quotation. As SteelHome knows, steelmakers quote SAE1008 6.5mm wire rod at 520 US dollars per ton (FOB), a rise of 15 dollars over pre-holiday level; quote SS400 3-12mm HRC at 510-520 US dollars per ton (FOB), a rise of 5-15 dollars per ton; quote DX51D 1.0mm HDG at 625 dollars per ton (FOB), a rise of 10 dollars per ton.

Coupled with strong demand, Chinese local steelmakers are bullish on the market and raise the quotation. Moreover, RMB valuation makes another driver for steel export rise. According to Bank of China, RMB exchange rate against US dollars on October 13 was 6.7, a valuation of 0.68 percent over September 30 and even a sharp appreciation of 6 percent over June 1. In other word, HRC export price, if other conditions are unchanged, rises 4 dollars over September 30, or even rises 30 dollars over June 1. The valuation of RMB drags down Chinese steel exports competitiveness and pushes up international price as well.

One steel exporting company tells SteelHome that steel buyers in Southeast Asian nations currently prefer to buying locally produced steel products, citing that the pandemic adds uncertainties to market. Another exporting body introduces that buyers from American regions remain active as they are resuming manufacturing activities which were halted in the first half year.

As per data released by Customs of China, steel export in September was 3.828 million tons, steel import was 2.885 million tons, generating 0.943 million tons of net export in the month. The net export hit record low of 2020. The high import in September is ascribed to contracts largely signed in June and July when international market was competitively priced. However, the rise in international market has cooled the bookings of Chinese buyers, which will be proved by October or November import data, to be released by the government department. Thereafter, net export will climb up again.

Table: China Monthly Steel Import and Export in 2020

Quantity in 10,000 tons

Steel

Jan-Feb

Mar

Apr

May

Jun

Jul

Aug

Sept

Imp

204.1

113.7

100.6

128

187.8

260.6

224

288.5

Exp

781.1

647.6

631.9

440.1

370.1

417.6

367.8

382.8

Net exp

577

533.9

531.3

312.1

182.3

157

143.8

94.3

Source: Customs of China, SteelHome Database


(To contact the reporter on this story: tina.tong@steelhome.cn or 86-21-50585733 15800777957)
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