Chinese mills have been undergoing depressive pangs with domestic steel price level remaining indolent. However the urge for production has remained undiminished with May production touching 68 million tonne. Surmounting inventory and low demand is veritable ground diversion to export.

In January-April 2014, export shipments already climbed 29% YoY to 25.87 million tonnes, according to the National Development and Reform Commission. At the same time, supplies went up just 19% in the same period last year.

Chinese suppliers can boost export sales thanks to falling finished steel prices: NDRC says a 8% decline was seen from January till April. Steel output, in turn, went up 2.7% YoY to 272 million tonnes.

China exports over 60% in the Asian region and India is majorly exposed. Not surprisingly India has become hunting ground for Chinese mills when the INR strengthens and Indian mills keep prices high.

It is learnt that nearly 300,000 tonne of HRC has been booked since April at price levels of USD 540-545 per tonne CFR Mumbai. Present offer levels are at USD 530-535 per tonne although bookings are scarce.

Plate bookings have been done USD 540-550 per tonne from Chinese mills. However in wide plates Ukrainian rule the roost with offers at USD 560-570 CFR.

In long products the import heat is turning on the Indian mills having remained in enviable for long. Billet offers are going at USD 504-505 per tonne CFR from China.Wire rods booking was done at USD 527-530 per tonne CFR. Rebar nonetheless remains untouched with Ukrainian mills doing business at USD 580-590 per tonne. The main reason being quality specific buyers adhering to Ukrainian material rather than trying Chinese.