China’s Jan-May steel exports up 2.5% on year
Source: Mysteel
Jun 10, 2019 14:30
Market insiders attributed the decline to softening overseas demand, as well as the still-uncompetitive prices of Chinese steel internationally.
“Demand in South Korea and Vietnam is weak these days,” a Shanghai-based steel exporter explained, citing the two largest buyers of Chinese steel. “Also, the price of Chinese products has become uncompetitive in global markets, especially when compared with India-origin steel products which are priced comparatively lower than those from other regions,” she told Mysteel.
She noted that offer prices for China-origin 3mm hot rolled coil were around $505-510/tonne on FOB basis in late May, lower by at least $20/t from April, given the weakening of domestic HRC prices. However, inquiries from traders in Vietnam only reached some $510/t on CFR basis.
“Over June-August, the export market will stay weak, given the decline in demand because of the rainy season affecting most of Asia and then the hot summer. Overseas consumers’ interest in stocking up will also cool down,” she said, adding that steel exports from Chinese mills will also decline further.
Another Shanghai-based steel analyst agreed. “The major (Chinese) steelmakers had to ensure a certain export volume and stabilize their exporting channels, however some small mills and traders opted to reduce their exports due to shrinking profits. Besides, it always takes a long time for exporters to see their money and there is always a high degree of uncertainty relating to export business. On the other hand, domestic sales can help sellers obtain cash return rapidly,” he said.
Also in May, China imported 982,000 tonnes of finished steel products, lower by a tiny 0.18% or 18,000 tonnes from the volume China imported in April. The May result took total imports over January-May to 4.88 million tonnes with a decline of 13.4% on year, according to GACC.
Written by Anna Wu, wub@mysteel.com
Edited by Russ McCulloch, russ.mcculloch@mysteel.com
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