Asian steel producers are facing a challenging second quarter due to potentially weak Chinese consumption and increased production. However, optimism continues that demand will recover around May due to the expected recovery in the Chinese real estate sector.
Asian HRC prices weaken
Asian HRC prices were trading at $592 Fob/China on January 3, 2023, but with the rapid increase that started in February, HRC prices rose to $663 Fob/China on March 31. Prices started to decrease in April, dropping to $620 on April 17 and to $580 Fob/China by April 30.
A Chinese manufacturer stated that China's real estate, automotive, and white goods sectors are weak, but steel producers continue to increase production.
China's billet exports will recover
Turkey increased its demand for semi-finished products after the earthquake it experienced in February. China's billet prices peaked in the first quarter.
Billet prices, which reached up to $650 cfr Turkey in March, fell to $550 cfr Turkey by the end of April.
China's billet export parity remained positive in the first quarter, making it profitable for exporters to continue exporting, and market participants believe that exports will increase further in the second quarter.
Some Asian countries appear to be increasing their exports in the second quarter by reducing domestic consumption.
Sharp fluctuations were seen in scrap prices
Scrap prices transported by sea in Asia experienced sharp price fluctuations following the earthquake in Turkey. The scrap prices, which reached $465 in March, fell to $403 cfr Turkey on April 28. However, the lifeless market in importing countries is creating an uncertain second quarter.
