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Overview of the steel market and export market in August

From 2021.8.1-2021.9.1, exchange buying rate US$ to RMB almost keeps the same in value from 1:6.45 to 1:6.44. Rating around 1:6.45 has been waving since Feb. after CNY holiday. There are lower point to 1:6.35 and highest point to 1:6.55. Averagely at level around 1:6.45 for more than half years of 2021.

Buying rate USD to RMB

Because of the coming Christmas, port congestion and exceed loading will still become the main factor that push higher freight cost. Because of main port congestion around the world and shipping offers from Sep. to Nov. for Christmas season, freight cost still have increase pressure. Statistic from Bloomberg mentioned container lines earning by 2021 reaches to over $100billion due to the high freight rates. While HPL first two seasons profit has reached over its profit for last 10 years. Along with the increasing of vessel order, there may have more space. But some mentioned exceed loading may be released but port congestion may become more and more fierce and become the most important factor that causes higher freight. In the short run, sea freight cost is hard to reduce. 

Shipping Windfall


Steel cost compared to Jul. averagely decreased 3-5% but then increases after middle Aug. There were news from some large steel making companies here in China that there may be export tax tariff implemented soon by middle to end Sep. Some mentioned related to steel coil and plate, some mentioned an even longer time till next year. It caused panic to many companies with strategy to deliver goods to free-tax zone to reduce loss. However the increasing free-tax zone cost has also become a hard choice. Scrap steel cost increases not only here in China but most countries around the world. 


Edited by Grace Cai from Bestar Steel Co., Ltd

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