The Chinese steel industry has been the epicentre of activity in Q3 albeit for wrong reasons. The factors at play have been repressive in tenor with government playing the stellar role commencing from removal of export rebates and culminating in drastic energy cuts leading to capacity elimination.
The slew of measures certainly left an indelible mark on the market. Chinese material became uncompetitive in the international arena as the removal of export rebate took the feather out with an increase in export levels. At the same time the governments avowed principle of purge in the domestic reality sector followed with the recent abrasive onslaught on production capacities to curtail emission has certainly crippled the tottering market.
The vacillating sentiments has exponentially increased the fickleness with prices undergoing abrupt swings within a span of few days. It has been typically noticed that the week opens with a bang which fizzles out in a whimper within no time exposing its hollowness.
Export levels from China had been typically holding its forte all through although it lost its relevance with passage of time as the international market crumbled . Ironically the Chinese mills could not reduce the offers owing to cost pressure after the removal of export rebate and hiked iron ore and coke prices.
The current debacle in export levels in China can largely be imputed to the plummeting market sentiments in all the regions viz., Europe, SE Asia, Middle East etc. The following table elucidates the thud of this debacle within a week.