SHANGHAI, Mar 24 (SMM) – It is understood that about 60,000 mt of seaborne steel billet will enter China as steel prices in the international market kept declining amid the coronavirus impact. While this grew investors’ concerns that greater inflows of cheap materials could threaten domestic spot prices, the latest SMM survey suggests that the impact will be limited.
As of March 20, fob prices of steel billet (excluding materials from the Commonwealth of Independent States) stood at $390-450/mt, SMM survey showed. The final purchase prices plus transportation fees and taxes were close to that of domestic steel billet, according to steel rolling mills in China.
While prices of steel billet from the Commonwealth of Independent States (CIS) were lower, which stood at $359/mt fob as of March 20, the import volumes have declined since 2010 and therefore unlikely to significantly weigh on domestic steel prices.
Customs data showed that China’s imports of steel products from CIS stood at 8,023 mt in 2019, down from 127,900 mt in 2011.
Moreover, imported steel billet mostly goes to steel rolling mills and the finished products usually make up the low-priced resources in the market due to their lower standards. This means that overseas falling prices of steel billet may unlikely impact prices of mainstream resources in China’s spot market.
Nonetheless, it remains noteworthy that potential greater supply will depress investors’ prospects for the futures market and reinforce worries about virus-related uncertainties.
