A Chinese steel FOB quote has five layers: mill base price (the biggest share, moves weekly with billet), processing, packaging & loading, export documents, and the trader's margin. Two quotes differ by 10–15% mainly because of the weight basis (theoretical vs actually weighed), stock vs mill production, grade interpretation, and quote validity. Compare quotes on normalized terms — not on the headline number.
Steel is the only commodity many buyers purchase where the same item, same week, same port, can legitimately be quoted 10–15% apart by two suppliers — and neither is cheating. Steel prices are built, not declared. Once you can see the layers, you can negotiate the right one instead of squeezing the wrong one.
The Five Layers of a China Steel FOB Price
| Layer | What it covers | Typical share* | How it moves |
|---|---|---|---|
| 1. Mill base price | The mill's ex-works price for the grade and section — driven by billet/iron ore, capacity and season | ~80–90% | Weekly or faster; the layer everyone watches |
| 2. Processing | Cut-to-length, drilling, punching, shot blasting + primer, straightening | 2–8% | Fixed per operation, scales with complexity |
| 3. Packaging & loading | Steel strips/bundles, dunnage, container stuffing labor, photographs | 1–3% | Stable; often silently excluded from cheap quotes |
| 4. Export documents | Customs declaration, EN 10204 3.1 certificate handling, CO/FORM E, booking fees | <1% | Stable; FORM E cuts duty for ASEAN buyers |
| 5. Margin | Trader/stockist margin for financing, stocking risk, QC and service | 2–6% | Negotiable — this is the layer to discuss, not layer 1 |
*Indicative ranges for stock-and-trade orders; mill-direct large tonnage shifts the mix toward layer 1. If a quote is dramatically under these structures, something in layers 2–4 has been left out — ask what.
Why Two Quotes Differ 10–15% — the Five Real Reasons
- Weight basis. Sections and plates invoice either on theoretical weight (standard dimensions × the density table — see our GB weight tables) or on actual weighed weight (over-loadbridge per bundle). A few percent of tolerance sits between the two bases. A "cheap" quote on theoretical weight can be more expensive per real ton.
- Stock vs mill production. Stock is loaded in days but carries the stockist's carrying cost; mill-direct is cheaper per ton but takes 20–30 days and carries a price-re-confirmation risk. Both are legitimate — they are different products.
- Grade interpretation. Asked for "A36", one supplier quotes dual-certified Q235B/A36 (certified to both standards, costs a little more) and another offers plain Q235B with a shrug. Only one of those passes a strict inspector. See our GB equivalents guide for where substitution is safe.
- Excluded extras. Packaging, photographs, third-party inspection and certificate handling are real costs. Quotes that omit them look 2–4% better until the loading photos arrive.
- Quote age. Billet re-sets frequently; a price from ten days ago can be 3–5% stale. Every serious quote states a validity window (our norm: 7 days).
Checklist: Compare Two Quotes in Five Minutes
- Same incoterm and port? (All our quotes are EXW ex-mill or FOB Huangpu / Nansha / Shekou — apples to apples.)
- Same weight basis, stated on the quote AND the invoice?
- Same grade commitment — exact grade, dual-certified, or "equivalent"? Certificate type (2.1/2.2/3.1) named? (See the MTC guide.)
- Same scope: packaging, loading photos, third-party inspection included or extra?
- Validity date on the quote? If none, ask for one before comparing.
Run the checklist and most "cheap" quotes either match the serious ones or disqualify themselves.
What Moves Chinese Steel Prices Week to Week
- Raw materials — iron ore and billet set the floor; mill list prices follow within days.
- Seasonality — construction demand in China and the monsoon/export cycles of Southeast Asia and Africa create predictable firm and soft windows.
- Policy — export rebates, capacity policy and environmental production curbs can reprice whole categories quickly (export rebate on most steel products is currently 0%, which is already priced in).
- Freight — under FOB it is your forwarder's line item, but container and bulk rates still swing your landed cost; time bookings sensibly.
- FX — RMB moves reprice USD quotes at the margin; a 7-day validity protects both sides.
Get a Current, Itemized FOB Quote
Send your size list or drawing to kelly@nikasteel.com or WhatsApp +86 191 5745 8011: itemized EXW/FOB price, weight basis stated, validity 7 days, EN 10204 3.1 certificates, loading photos and SGS/BV/TUV inspection on request — reply within one working day. MOQ 5 tons.