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Monthly steel market news (2022.02.01-2022.02.28)

Gradually after CNY holiday ended, international business seems with many potential opportunities. Crude oil cost keeps increasing and breaking $100/barrel which make petroleum exploration and extraction projects faster their steps.

Many countries’ international business policies also changes accordingly based on its export&import condition. Bangladesh has increased its TT payment amount up to $500,000 for importing business with no need of L.C. Egypt announces its new policy to do business by L.C since 2022.3.1. Brazil decreases 25% of its IPI to reduce industrial burden. As time goes, Russia swift system was claimed by USA and some european countries to be cut off but not yet come into force.

As for steel cost, based on limited supply in Chinese market and production limitation by Feb. from government, steel cost has kept increasing and comes stable by end of Feb. Since demand is not positive in domestic market, most did not think the cost could stay at high level. But as March. comes, steel cost reaches another higher point and increased at least 5% in 2 days. Commodity inflation is spreading quickly to most countries under sanction to Russian. While Russian aluminium counts 6% of global production capacity, nipple 7%, cost increase immediately.

Clarksons announced its report recently that global new vessel orders last year are over 1746vessels with totally 0.123billion loading tons. Sea freight cost from China ports to other countries has decreased to some extent. But if world port jam and handling frequency does not recover, sea freight may still keep at high level.

When USA economy recovers with crude oil cost increase, Russia sanction factors, exchange rate decrease of RMB may be foreseen. However, since 2021 til now RMB to dollar rate keeps between 6.45:1 and 6.3:1. The world is full of uncertainties and challenges, what we can do is doing our best right now. 

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