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Home > MEPS Steel News - 11.11.2013


Steel producers in the United States need to brace themselves for a significant increase in the supply of steel from China in the final quarter of this year. The price differential between domestic prices in the United States and the estimated landed price for exports from China (usually a strong correlation to the volume of imports) has grown steadily during the second half of 2013.

In the first nine months of this year, total Chinese steel exports to the US were 27.7 percent up on the figure at the same time in 2012. With domestic prices rising in the United States and Chinese prices under negative pressure, the increase is expected to be above 30 percent by the end of this year.

The threat from Chinese imports is not uniform across all product forms. During the first nine months of this year, US imports of hot rolled coil, structural sections and merchant bars all show reductions compared to the same period in 2012. In contrast, deliveries of hot rolled plate and electrical sheet are up by, in excess of, 20 and 25 percent, respectively, but these tonnages are relatively small.

The most significant threat to the domestic suppliers in the United States came from imports of wire rod in the first nine months of this year. The total recorded exports from China to the United States more than doubled to 545,500 tonnes in the period. We anticipate a modest reduction in the rate of supply in the final quarter of this year because the price differential between Chinese imported material and domestic values is diminishing.

Chinese exports to the US of cold rolled and coated sheet dropped significantly in the March to June period as local prices increased making them less competitive with US values. However, since then, the price differentials have expanded and export tonnages have increased significantly. This situation is expected to continue for the remainder of this year because the Chinese market is weak and US demand quite firm.

Source: MEPS China Steel Review - Free October Issue here

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