Devalued Yuan Leads China Steel Producers To Cut Prices
08/14/2015 - With China having devalued its currency earlier this week, steelmakers there are already moving to reduce export prices, according to a Reuters report.
Reuters reported that some smaller Chinese mills already have lowered rebar prices by $5 to $10 per tonne. And an unidentified, privately owned mill has cut billet export prices by $5, taking them to $295 per tonne on a free-on-board basis, Reuters said, citing a senior export official.
Another official from a state-owned trading firm told Reuters that the firm has no choice other than to consider price cuts.
"The devalued yuan will make our exports more competitive... we have no other option but to consider cutting prices as overseas buyers are aware that Beijing has pushed the yuan lower," the official told Reuters.
The devaluation in the yuan lessens the relative price of Chinese steel exports by around $5 per ton, Seshagiri Rao, joint managing director of India's JSW Steel Ltd. told Reuters.
"It will further sharpen the ability of Chinese steel companies to export to India. They are very desperate to export steel at any price," Rao said.
JSW is one of India's largest steelmakers, and Rao's company told Reuters in a separate report that it is considering cutting prices on some of its products to keep pace.
Reuters said the yuan has fallen almost 4 percent since the devaluation, and some in the Chinese government are pushing for it to fall further.
American Iron and Steel Institute President CEO Thomas J. Gibson said in a statement that the devaluation further illustrates that the Chinese government is actively manipulating its currency values to promote exports.
"China has consistently intervened directly in foreign exchange markets to control the value of the yuan versus the U.S. dollar to make their exports more competitive and impose new barriers to imports. Our government must address the massive damage that China’s undervalued currency is causing to our nation’s manufacturing sector, especially the steel industry,” he said.
Another official from a state-owned trading firm told Reuters that the firm has no choice other than to consider price cuts.
"The devalued yuan will make our exports more competitive... we have no other option but to consider cutting prices as overseas buyers are aware that Beijing has pushed the yuan lower," the official told Reuters.
The devaluation in the yuan lessens the relative price of Chinese steel exports by around $5 per ton, Seshagiri Rao, joint managing director of India's JSW Steel Ltd. told Reuters.
"It will further sharpen the ability of Chinese steel companies to export to India. They are very desperate to export steel at any price," Rao said.
JSW is one of India's largest steelmakers, and Rao's company told Reuters in a separate report that it is considering cutting prices on some of its products to keep pace.
Reuters said the yuan has fallen almost 4 percent since the devaluation, and some in the Chinese government are pushing for it to fall further.
American Iron and Steel Institute President CEO Thomas J. Gibson said in a statement that the devaluation further illustrates that the Chinese government is actively manipulating its currency values to promote exports.
"China has consistently intervened directly in foreign exchange markets to control the value of the yuan versus the U.S. dollar to make their exports more competitive and impose new barriers to imports. Our government must address the massive damage that China’s undervalued currency is causing to our nation’s manufacturing sector, especially the steel industry,” he said.
