CRU: Global steel export prices under pressure as demand weakens

Chinese steel export prices fall amid persistently weak demand

Chinese steel export prices either declined slightly or remained stable over the past week, as demand from both domestic and overseas markets remained sluggish.  

HR coil prices, the most-traded product in the export market, edged down by $3 per metric ton (mt) or 0.6% week over week (w/w). CR coil and HDG prices fell by 0.4% and 0.5%, respectively, while prices for other products such as rebar, wire rod, sections and plate remained steady.

Market participants reported that some mills re-allocated material towards the export market as domestic sales were lower amid the ongoing summer lull. This, as a result, put additional downward pressure on export prices for some steel products. 

Meanwhile, escalating Middle East tensions drove up freight rates to destinations such as Africa and South America, discouraging buyers from these regions from placing new orders. Freights from China to Africa, for example, increased by $5-8/mt in the second half of last week.

Demand for Chinese billets, however, slightly improved in Southeast Asia, though competition remained strong within the regional market due to slow seasonal demand and reduced activity in the Middle East. In recent weeks, a major Indonesian mill was actively selling billets to markets such as Malaysia and Vietnam. In parallel, Chinese rebar producers also faced more competition from a Malaysian mill in traditional export destinations such as Singapore and Hong Kong. 

Regarding tax-evading exports, according to market sources, controls remained tight at Jingtang and Tianjin ports – both are major steel-exporting ports in northern China. This has, to some extent, prevented export prices from falling sharply, alongside cost factors.

Indian suppliers reduce HR coil export offers

CRU’s Indian HR coil export price fell by $13/mt w/w to $545/mt FOB East Coast as Indian suppliers lowered their price offers across major export markets to boost sales. Indian offers to the Middle East and Vietnam fell by $10–15/mt w/w, while those to Europe fell by $10/mt w/w. In the Middle East, Indian offers compete directly with discounted offers from China.

The freight market disruption due to the re-escalation of the Middle East conflict has significantly raised freight rates, particularly for the India West Coast to Saudi Arabia route. Thus, on a CFR basis, Indian price offers are at a premium to Chinese offers and lose out on deals. In Vietnam, on the other hand, the underlying demand remained seasonally weak and buyers continued to drag negotiations as they have no immediate need to procure material. Indian suppliers have been trying to match buyer bids, which keep dropping every week.

In Europe, buyers are actively assessing availability of the remaining tariff-free quota volumes and CBAM-related compliance costs before concluding purchases. While deals are being negotiated actively, none was concluded in the past week as buyers remained very cautious. One key sticking point is that some buyers are awaiting the European Commission’s confirmation of third-party CBAM certification bodies, which is expected in September, before making procurement decisions. This is because default values for carbon costs on Indian-origin material are particularly high, making imports commercially unviable. 

Weak demand and seasonal factors pressure Turkish export prices 

Turkish rebar export prices remained unchanged w/w at $575/mt FOB Turkish port. Prices remained under pressure as export demand was rather weak due to seasonal factors, such as the holiday period across the European market, while high temperatures also capped procurement in the construction sector. Some sales were made to South America and Yemen, however, these were insufficient to elevate prices.

Turkish HR coil export prices declined by $10/mt to $575/mt FOB Turkish Port. Prices came under pressure as demand from the European market remained muted due to the exhaustion of Turkish tariff-rate quotas and the holiday period. Buying interest from other destinations also remained sluggish, and buyers pushed for further price declines. 

Key trade prices

China price detail: 

HRC: An average of 13 price points for HR coil were collected daily during the week. On Thursday, 13 price points of SS400 3mm gauge between $502-545/mt FOB were collected. Nine of the prices were included in the final calculation, the remainder were prices for other grades or beyond the mainstream levels, therefore were excluded according to CRU’s methodology for this price. CRU set the spread between offer and bid at $5/mt to reflect the actual market level.

Rebar: A total of 12 price points were collected for the weekly assessment, including 11 offers and one indication. Eight offers were included in the final calculation, with the remaining excluded for being standard not in line with CRU definition for the price. The indications were collected for reference but not included in the final calculation according to CRU methodology for the price. The deal price was excluded as it was not repeatable. The offer/bid spread was unchanged at $5/mt to reflect the actual market level.

CRC: A total of 12 price points for SPCC 1.0mm gauge CR coil were collected over the past week, among which four firm offers at $540-550/mt FOB and one deal price at $540/mt FOB was included in the final calculation according to CRU’s methodology for the price. The remainder were for CR coil in other grade or beyond prevailing market level and were therefore excluded from the final assessment. CRU set the offer/bid spread at $5/mt this week to reflect the actual market level.

HDG: A total of 18 price points for SGCC 1.0mm gauge zinc-coated HDG coil were collected over the past week, among which six firm offers between $585-620/mt FOB and one deal price at $585/mt FOB was included in the final assessment. The remainder were for HDG coil with coating different from Z120, with other grade or beyond prevailing market levels and were therefore not in line with CRU’s definition for the price. CRU set the offer/bid spread at $5/mt this week to reflect the actual market level.

Medium plate: A total of 12 price points were collected to assess the weekly price, including six offers, two deal prices and four indicative price points. Two offers were rejected for being above prevailing market levels and four indicative price points were rejected given CRU methodology for the price. The offer/bid spread was set at $5/mt to reflect the actual market level.

Structurals: A total of nine price pints were collected to assess the weekly prices, including five offers and four indicative prices. The indicative prices were excluded from final calculations given CRU methodology for the prices. Three offers were rejected for being above prevailing market levels. The offer/bid spread was set at $10/mt for UK grade structural to reflect the actual market level.

Low carbon wire rod: A total of 19 price points were collected for the weekly assessment, including 13 offers and six deal prices. Six offers were included in the final calculation, with the remaining offers excluded for not being representative prevailing market levels by using expert judgement. One deal price was included in the final calculation with the remaining excluded for being non-Chinese wire rod, not verified, for high carbon products or below market levels. The offer/bid spread increased from $5/mt to $10/mt to reflect actual market levels as mills were more willing to accept lower prices to boost sales volume as the month end approaches.