TEX reported that, with a recovery of export market prices of steel products in Asia, it is certain that transaction prices of various steel products for export will go up there in the October to December 2010 quarter. For the prime factor, low prices are disappearing in the wake of a slowdown in China''s steel exports.
China''s monthly steel exports this year rose to a level of 4 million tonnes from April and they hit 5.5 million tonnes in June, the bulk of which went to the rest of East Asia, totaling around 3 million tonnes in June. The Chinese export offensive brought a nonstop fall in steel prices across Asia when various users limited steel purchases to immediate requirements in expectation of a further decline in steel prices, a situation where various steel prices came under a continued downturn in export markets.
China''s monthly steel exports, however, turned downward to 4.55 million tonnes in July and fell off to 2.8 million tons in August, down 38.5% from a month ago, plunging to half the June export volume. As a result, various users in Asia reacted with the conclusion that what they pay for steel purchases would rebound from the bottom before long. At present, it looks as if various steel prices in Asia are set to advance in export deals.
Having a favorable influence, too, on export markets in Asia are expectations that the problem of China''s overproduction could be resolved because the central government has forced domestic steelmakers to reduce what they put out by restrictions on electric power and water supplies for their works. In effect are combined cutbacks of 3.5 million tonnes per month toward yearend 2010 in steel production from the three provinces of Hebei, Zhejiang and Jiangsu, in which the September cutback is reported as 5 million tonnes. China''s domestic steel prices have begun to indicate an enlarged upswing as if to meet the production cutbacks.