Hebei Yehui Metal Materials Co., Ltd.

Three major factors behind the fluctuation of hot rolled coil export price

As a basic industrial raw material, the sharp fluctuations in the export price of hot-rolled coils affect the nerves of the global steel market. This fluctuation is not accidental, and behind it is a complex game of multiple factors. In-depth analysis shows that the following three core factors are the key to driving the fluctuations in the export price of hot-rolled coils:

🔥 Factor 1: High-pressure transmission of raw material costs
Iron ore and coke prices: As the core raw materials for the production of hot-rolled coils, the costs of iron ore and coke account for the absolute majority of the total cost. Supply changes, mine accidents, geopolitical risks, and tight supply and demand in the coking coal market of international iron ore giants (such as Vale, Rio Tinto, and BHP Billiton) will be directly and quickly transmitted to the production end of hot-rolled coils. When raw material prices soar, steel mills will inevitably push up export quotations to maintain profits.

Energy cost surge: Steel production is an energy-intensive industry, and the sharp fluctuations in electricity ⚡️ and natural gas prices (especially affected by the turmoil in the international energy market) have significantly raised the costs of smelting and rolling processes. The unpredictability of energy costs has become a key variable in export pricing.

🌏 Factor 2: International supply and demand pattern and trade policy struggle
Global manufacturing boom: Hot-rolled coils are widely used in automobiles, shipbuilding, machinery manufacturing, construction and other industries. The manufacturing PMI index and infrastructure investment plans of major economies (such as Europe, the United States, and Southeast Asia) directly affect their import demand. Strong demand pushes up prices, while weak demand leads to intensified price competition.

Changes in production capacity of major suppliers: As the world's largest steel producer and an important exporter of hot-rolled coils, China's domestic steel industry policies (such as capacity replacement, environmental protection restrictions, and output regulation) have a huge impact on the global supply side. The production situation and export strategy adjustments (such as imposing tariffs or providing subsidies) of other major exporting countries (such as India, Russia, Japan and South Korea) will also significantly change the balance of supply and demand in the international market.

Trade barriers and anti-dumping: Anti-dumping and anti-subsidy investigations frequently initiated by importing countries and the punitive tariffs finally implemented directly raised the "threshold cost" for hot-rolled coils to enter the target market, forcing exporters to adjust their pricing strategies or turn to other markets, causing regional price fluctuations.

💱 Factor 3: Exchange rate fluctuations and ocean shipping cost fluctuations
Exchange rate risk: Hot-rolled coil exports are usually settled in US dollars. The fluctuation of the RMB exchange rate against the US dollar directly affects the actual income and pricing strategy of Chinese export companies. The appreciation of the RMB will weaken the competitiveness of export prices or squeeze profits, forcing companies to raise prices; depreciation may bring short-term price advantages. Fluctuations in the currencies of other exporting countries also affect their quotations.

High ocean shipping costs: International ocean shipping costs (especially freight rates on key routes such as China-Europe and China-Southeast Asia) are an important part of export costs. Container shortages, port congestion, fuel price fluctuations, and route changes caused by geopolitical conflicts (such as the Red Sea crisis) have all caused shipping costs to soar and plummet. This part of the cost will eventually be reflected in FOB or CIF quotations, exacerbating price fluctuations📈.

Conclusion:

The fluctuation of hot-rolled coil export prices is the result of the interaction and joint drive of the three core factors of "high raw material costs", "international supply and demand and policy games" and "exchange rate shipping fluctuations". For export companies and import buyers, a deep understanding and continuous tracking of the dynamic changes of these factors, refined cost analysis and flexible market strategy adjustments are the key to grasping the direction, reducing risks and seizing opportunities in the volatile global steel price wave. The resilience of the global supply chain is constantly being tested, and the price fluctuations of hot-rolled coils will continue to be the focus of industry attention in the future🔥.