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Chinese strip galvanizers struggle in the market
Date:Jun. 1, 2012
 It has been nearly one month since China's government issued a new export policy. The 5 percent export tax led all Chinese strip galvanizers to feel a dim market ahead. A very sharp down from their sales record recently which resulted from the 5 percent export tax. They have to raise their export price in order to offset extra cost. It is also a large number of strip galvanizers in China whose export volume has been a considerable quantity that Chinese government has to strike.

Furthermore, current sea freight is another obstruction for strip export. As oil price surged in global market and maximum loading restriction from shipping company, strips export cost have increased US$40~50/MT since April this year. Many shipping companies only allowed 15~18MT per container maximum instead of 23~25MT per container previously.

The same characteristics of Chinese strips galvanizers that they produce strips from hot rolled strips to the end, and some of them are " integrative" rollers as billets fed into production. Hundered of mills like that in China who have not enough finance capability to shift their production line to high-value-added product in a short term. As China's steel export boomed in 2005, those strip galvanizers have set their sales orientation overseas market though local market was also strong at that time. Actually, those strip galvanizers have not very clear outlook of sales work in oversea market. Strong competition among them which lowered down each other's price, just catering for customers. Their products flooding into overseas market did not obtain any better reputation for China's steel commodity, on the contrary, strip production from hundred of mills would cost more energy sources, even a sacrifice of local environment. The sales numbers of those galvanizers only contributed Chinese steel export records.

However, opportunity for galvanized strips export still exist in the market recently. In terms of Chinese government's new export policy, galvanized strips with width over 600mm remain 5 percent tax rebate. Many insiders forecast that Chinese government will release another policy of tax rebate cut for all galvanized coils over 600mm in width. No one knows government's schedule. In order to cope with any change in the uncertain market, Chinese strip galvanizers should kep eyes on high-end steel products and they must achieve their self-development based on long-term view.