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Steel market: results of the December PRC

In November 2014 it is safely possible to speak of a general decline of the steel market in nearly all segments. In December, the situation has changed significantly. Some types of steel products have risen in price, some — have fallen in price. The changes were different in different regions, besides having factors affecting quotes.

One of the main factors affecting the steel market is China. In November, the level of exports of steel rose to a record 9.72 million. Tons. For 11mesyachny period a total volume of 83.6 million tons -. 46.8% higher than the same period last year. The increase in China's exports led to the export restrictions. Moreover, the first limit is focused on the Chinese manufacturers. The result of the measures taken is to reduce the external supply. One solution to the arisen situation are the rumors about the cancellation of VAT refund to exporters of steel products alloyed with boron.

VAT refund steel suppliers was canceled long ago. Exceptions are made only for companies producing products with high added value. In the same category were the product having a minimum — 0.0008% — boron. To date, boron is introduced into the overwhelming volume of Chinese export steel. It is also part of the workpiece to be exported out of the country as a square bar. According to specialists, VAT refund cancellation will affect the increase of export prices of $ 40−45 USD / ton. Consumers to a similar increase in the cost is not ready. Ultimately, by the end of the year, many Chinese manufacturers stopped outside activities to clarify the situation.

That state of affairs did not hesitate to use Turkish manufacturers, Japan, Russia and India. However, increasing the value only affected long products. flat steel prices continued to slide, to which, again, influenced by several factors. In China, the cost of steel production declined rapidly towards the end of the year. The imbalance between supply and consumption increased. The slowdown of economic development has reduced the consumption of steel in the period January-November by 2% compared to the same period last year.

Steelmakers China, however, the rate is not reduced. Given the low cost of iron ore, steel companies profit, despite the decline in rental prices. Chinese analysts believe that the quotes will continue to decline over the January 2015 Renewal of the growth will not happen until the end of February.

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