Cold rolled coils exports from Japan in the first half (H1) CY’21 (Jan-Jun’21) rose 11% to 1.02 mn t compared to 0.92 mn t seen in the same six months of the previous calendar, as per Customs data maintained with SteelMint.
Meanwhile, on a m-o-m basis, exports went up 10% to 0.18 mn t in Jun’21 compared to 0.16 mn t in the previous month of May.
Exports to China drop in H1: Though China was the third-highest CRC importer from Japan, volumes dropped 12.5% in the period under review.
China’s overall finished steel items imports in H1’21 are down 15.6% to 8.4 mn t compared to 9.9 mn t seen in the same period in CY’20. The higher finished steel prices from importing countries have been a dissuading factor. If production cutbacks in China are still encouraged by the government, international steel prices will remain high, on the back of tighter supply since China accounts for 60% of the global steel production volume.
Moreover, China’s finished automobile production curve has been steadily downward from March till June, as per available data, which has propelled a drop in CRC imports. In fact, as per reports, China’s vehicle production and sales declined 16.5% and 12.4% respectively in Jun’21.
CRC is the core material of the automobile industry, used mainly for the shell and structure of a vehicle.
Thailand, Indonesia largest importers: Thailand, Indonesia and China continued to be the largest importers of CRCs from Japan in H1, as was seen in the same period last year. Exports to Thailand were up 36% to 0.25 mn t in H1CY’21 from 0.19 mn t in H1CY’20, and to Indonesia by 26% to 0.15 mn t against 0.12 mn t, over the same period.
Exports to Malaysia too should a healthy 18.5% growth y-o-y in H1.
Outlook
Finished automobile production is showing an upward trajectory in a key consuming country like Indonesia while Thailand, the top importer, is seeing production recovering too. Thus, even if exports to China show a downward curve, these two countries will probably keep Japan’s CRC imports buoyant going forward. The only dissuading factor is the rising Covid cases in South East Asia, which may put a damper on economic activities.
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