This has made it very challenging for market participants outside of China to make their procurement and pricing decisions relating to the Chinese products.

These challenges have, in no small part, led to a big drop in Chinese exports this year. The country has exported 54.47 million tonnes of finished steel in the first eight months of 2017, down 28.5% compared with the same period of last year.

Against this background, Metal Bulletin is consulting with market participants about the feasibility of upgrading its weekly assessments of export prices for HRC and rebar – two of the most liquid steel products in China’s export market – to daily indices.

The frequent changes experienced by both domestic and export prices for these products this year have been attributed to, among other things, the central Chinese government’s aim of cutting 50 million tpy of crude steel capacity in the country, its crackdown on the production of substandard steel products as well as its efforts to cut emissions.

“The goals outlined by the central government early this year had led to expectations of lower steel output. Whenever new measures were reported in the media, steel prices rose accordingly,” a major trader in Shanghai said.

Demand has not always been strong enough to support the price increases, however. This is largely why steel prices have been retreating after having experienced increases.

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Movements in the ferrous futures market have also started becoming more intertwined with spot prices in both the domestic and export markets.

“In most cases, the changes experienced by futures contracts influence spot market prices,” a second steel trader in Shanghai said.

“Overseas buyers are paying as much attention on the daily changes in the paper market as China’s exporters,” an export trader in east China said.

As such, export prices need to be tracked daily instead of weekly to present a clearer picture of the highly volatile market, sources said.

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The pricing consultation for Metal Bulletin's proposed fob China HRC index and fob China fob rebar index ends on October 8, 2017.

The full consultation document for the fob China HRC index can be found here, and that for the fob China rebar index here.