Steel plate export market optimistic
----Interview with Rogick Law
Managing Director
Promisteel (Tianjin) International Trade Co., Ltd
- Promisteel (Tianjin) International Trade Co., Ltd acts as a steel supplier based in China and provides steel product services to the clients all over the world. Adhering to the philosophy of "Our Promise, Your Wish", the company is committed to providing the most reliable and satisfactory supply solutions for worldwide customers. The users come from industries such as industrial and civil construction, special engineering, automotive machinery, household appliances, hardware equipment, and re-rolled steel.
- Asian Metal: Good afternoon, Mr. Law. Welcome to the interview. Please briefly tell us about your company.
- Mr. Law: Formerly known as GBR Steel (Tianjin) Co., Ltd., Promisteel (Tianjin) International Trade Co., Ltd. mainly deals with flat steel products such as steel plate, HRC, CRC and GI with the brand of "Promisteel". The annual trading volume reaches about 150,000t.
- Asian Metal: Which countries and regions do you export steel plate to? How about the proportion for export destinations?
- Mr. Law: Our steel plate products are basically exported to the countries and regions along the Belt and Road route including but not limit to Thailand, Indonesia, Bangladesh, and Middle East such as Saudi Arabia, Qatar, North Africa and some regions in South America. The proportion in South Asia, East Africa, and North Africa accounts for approximately 70% in total.
- Asian Metal: Chinese steel plate export prices increased by about USD130/t in total from late last November to this Mid-March with the markup of around 25%. What do you think are reasons for the quick rise?
- Mr. Law: Personally, I believe there are three main reasons boosting the prices to go up. The first reason is the reduced supply caused by suspension of steel mills in Q4, 2022 when steel mills such as Tangshan Steel and Tianjin Steel conducted facility maintenances. Secondly, the improving demand from overseas pushed the prices up. Following the rising investment, more and more overseas projects started operation, and the demand for steel plate recovers. The last but the most important reason is the rising prices in the domestic market. Prices of steel plate in the domestic market began to move up since early last November with a the total increase of about RMB700/t (USD101/t) till now. The export prices followed the domestic prices accordingly and closely. When prices in the domestic market kept rising, the purchasing activities of overseas clients increased and market participants held bullish attitudes, boosting prices to go up.
- Asian Metal: How about the overseas demand for steel plate at present? Is there any improvement YoY?
- Mr. Law: The demand from the overseas market has been improving since the middle of last Q4, and it increases more quickly than that in the domestic market, with the increase of around 30% YoY. Statistics from China Customs shows that the steel exports in the first five months of 2023 rose nearly by 40.9% YoY to 36.369 million tons. We estimate that the total volume would increase to above 80 million tons this year from 67 million tons or so in 2022.
- Asian Metal: How do you think about the steel plate export price trend in the second half of this year?
- Mr. Law: We hold cautiously optimistic attitudes towards the market. Firstly, the number of orders that most steel mills have signed in the first five months of this year already surpassed that in the first half of 2022, so steel mills, with limited export sales pressure, intend to raise their prices further. Secondly, the demand in the domestic market keeps improving and most exporters hold bullish attitudes. Thirdly, overseas suppliers keep lifting prices stimulated by the recovering demand from the US, Europe and Middle East, and the price advantage of Chinese steel plate appears to be more obvious. However, the market still sees uncertainties dragged by the bank crisis in the US and Europe. As a consequence, we do not expect a significant price hike and anticipate that export prices of steel plate would rise gently to USD750/t by the end of the year.
- Asian Metal: Does the exchange rate fluctuation impact the steel plate export market continuously?
- Mr. Law: Shifts in the exchange rates definitely have continuous impacts on the steel plate export prices, which might even be the most important factor to the fluctuation of export prices. The exchange rate between CNY and U.S. dollars widely fluctuated from 6.7 to 7.0 in February and March, and then increased to around 7.1, forcing steel mills and exporters to adjust prices timely. To avoid the potential risk of the exchange rate fluactuation, we tend to settle prices in advance for 60%-80% of orders.
- Asian Meal: What is your plan to further improve the competitiveness? Do you plan to diversify or upgrade products in the coming years?
- Mr. Law: Absolutely. We face fierce competitions in the carbon steel plate market due to transparent prices. To broaden our sales channels, we plan to develop the market both horizontally and vertically. On the one hand, we would consider adding semi-processed products such as steel structure, photovoltaic bracket, cabinet and container barrel to our export list; on the other hand, we strive to broaden the export varieties so as to serve different clients accurately. For example, we will try exporting welded bottle steel (mainly used for liquefied gas tanks), aluminum zinc and zinc-aluminum-magnesium products to some developing countries.
