The may policy of Japanese, Korean, Taiwanese companies, almost to the end of last month refused from lower export prices for flat-rolled products (excluding plate steel and, partially, cold rolled coils), as expected, turned into a win of their Chinese competitors received the opportunity to expand the volume of supply on the regional market. In may, Chinese exports of steel products reached 5.23 million tonnes, which is the highest figure for the last 23 months. Chinese hot - and cold-rolled coils, galvanized steel, wire rods was in the region, as they say, out of competition.
In late may, the East Asian steelmakers still have started to reduce the cost of production, and in June, this process accelerated. Export prices in Taiwanese and Korean hot rolling down to the level of $625-645 per ton FOB. Japanese steelmakers, the benefits of which are relatively high demand in the domestic market and a guaranteed market in the form of Indian and Asian industrial enterprises, built by corporations from Japan, while offering the same products at $650-670 / t FOB. However, further decline is likely inevitable.
The fact that Chinese companies also continue to reduce the price. Domestic rental market is crowded, so for many Chinese manufacturers export operations is vital. By the end of the first half of June, some exporters in order to stimulate demand, which had declined in the region due to seasonal factors lowered quotes for hot rolling to less than $600 per ton FOB. The lowest rates ? $585-595 per MT FOB, as previously observed for deliveries to Vietnam. However, according to traders, the majority of transactions are at $600-610 / t FOB.
Along with the Chinese aggressive export policy and Indian steelmakers. In the first half of June, they dropped the price of hot-rolled steel coil from more than $620 to $600-605 / t FOB. As expected, the low-end products will offer buyers in Southeast Asia and the Russian company ? their return to the market expected in the second half of June.
Overall, the reduction in price of steel products in the region and contribute to the monetary factors. Courses Korean, Taiwanese, Indian currency is down against the dollar. On the one hand, is conducive to exports, but also puts barriers to import. Domestic prices of hot rolled coils in Taiwan despite all attempts of local companies to avoid recession has been reduced to the equivalent of $690-710 / t EXW, while in South Korea ? to $710-730 per ton EXW. With all the shipping costs, the products are quite competitive relative to imports.
Very low recently dropped the price of steel plate, although the shipbuilding industry in Japan and Korea gets a lot of orders. The main problem is oversupply, which quotes the shipbuilding sheet closer to the turn of $600 per ton CFR, which is below cost for most regional producers. Commercial heavy-gauge steel, Chinese production is sold for export at $590-600 / t FOB.
In principle, the Asian metallurgical companies are able to stop the decline by the beginning of the third quarter, limiting the scope of the proposal. However, they have no way to resume growth. The demand for steel products in the countries of the region are extremely weak and will likely not aktiviziruyutsya, at least until the end of summer.
 
Victor Tarnavsky
Rusmet.ru