Exchange rate factors affect China's steel import and export market
2018-06-27 22:00:32
On January 13, Tianxiang Gupin released a research report, pointing out that the impact of exchange rate factors on China's steel industry has been significantly affected. According to the report, at the end of February 2009, 300,000 tons of HRC from Ukraine and other countries or regions will enter the Chinese market, accounting for 5% of the domestic monthly HRC. In December 2008, Shanghai already started selling hot rolled coils from Taiwan. From the comparison of the international market prices, the price of hot rolled coils in the Chinese market is 609 US dollars, while the CIS exports 430 US dollars, which is lower than the Chinese market price of 29.4%. In addition, the prices of hot-rolled coils in the Middle East import market and Southeast Asian import market are far lower than the Chinese market prices. The huge price gap has made China’s steel products not only lose their competitiveness in the international market, but even the domestic market. Tianxiang Gu believes that the exchange rate factor is the main reason for the impact of imported steel on the domestic market. Since 2008, the currency of the Commonwealth of Independent States has depreciated significantly.
From the end of 2007 to January 2009, the Ukrainian currency hryvnia depreciated 36.6% against the US dollar, while the RMB appreciated 6.8% against the US dollar. If the exchange rate factor is excluded, China's steel products have a clear cost advantage over Ukrainian steel products. However, under the circumstance that the effective exchange rate of the RMB has risen significantly, the international competitiveness of steel products produced in China has greatly declined.
From the end of 2007 to January 2009, the Ukrainian currency hryvnia depreciated 36.6% against the US dollar, while the RMB appreciated 6.8% against the US dollar. If the exchange rate factor is excluded, China's steel products have a clear cost advantage over Ukrainian steel products. However, under the circumstance that the effective exchange rate of the RMB has risen significantly, the international competitiveness of steel products produced in China has greatly declined.
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