China’s steel export of the first quarter exceeded the industry expectation.

Source: Internet

According to China Customs, China exported 9.98 million tonnes of steel, increased by 29.6% on year-on-year basis; the total export of the Q1 was 27.83 million tonnes, with the year-on-year growth of 8%. The export of March was far higher than expectation and reached a record high of over this year.

Previously, the industry was expected that the export of the March would be lower than that of January.

“Although it is expected fewer anti-dumping cases this year, the law enforcement would strengthen,” said the industry player, what’s more, as the domestic steel price rebounded, the losses of domestic steel enterprises mounted, and the de-capacity intensified, the output would relatively reduce and the gap of the domestic market would enlarge, therefore the export market share would be squeezed.

The domestic steel price index of 13th April was RMB2,650 per tonne. The price increased RMB210/t in January to February, and then further rose RMB570/t since March. That is to say, the present price of the steel is RMB780/t higher than that of the middle of December last year. The rise in steel price has abated steel trader’s enthusiasm on exporting.

 “Most of the exports in March were ordered in January or February when the domestic steel market was in the slack season and the price had not jumped yet,” said steel analyst Qiu Yuecheng, the international steel market is also in the upward tendency, and thus the oversea customers have been busy replenishing stocks. The international trade environment is not as bad as what has expected.

According to the article 15 of Protocol on the Accession of the People's Republic Of China, in 11th December 2016—the 15th anniversary of China’s entry in the WTO, China will automatically turn itself into a country of market-oriented economy. Facing the crisis of decline, the steel industry of the EU is asking the EU to deny China’s status of “market-oriented economy”, and continue to impose anti-subsidy and anti-dumping duties on China’s steel products, and levy high punitive tariffs on China.

According the source of the industry, “the EU government has not officially denied it yet, and they are just investigating the whole issue through legal procedures.”

Among the EU, the downstream terminal corporations and the enterprises that imported steel products from China were in some degree hoping that the anti-dumping toward China would reduce, and therefore to reduce their production cost. Those are the factors that temporarily keep China’s steel products in high export volume.

Besides, according to Japanese Economic News, as China started to reduce its steel exports, the buyers of south-east Asian increased purchase price on steel to ensure stable purchase volume, which stimulated enthusiasm on exports in the domestic market.

With the continuous increase on the domestic steel price, it is generally expected that steel exports would decline over the period of April to May.

Since March, domestic factories enjoy sufficient domestic orders but very weak export willingness. The export quotation has increased by nearly USD100 /t, but the export orders have decreased.

Some insiders believed that the export volume of the steel would progressively decreased by 10% in the next few months to the normal range of the exports given the present economic environment—that’s 8 to 8.5 million tonnes.

However, since the capacity recovered while the demand has not improved yet, the steel price is expected to fall back in H2.

*This article is an edited and translated version by CCM. The original article comes from thepaper.cn.

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Tag: steel

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