China exported 2.4 million tonnes of flat steel products in October, which was higher by 200,000 tonnes or 9% from September and making for the second successive on-month rise, according to the latest statistics from China’s General Administration of Customs (GACC). The uptick in exports reflected Chinese mills and traders hurrying to fill a shortage of supply of finished steel in international markets, plus the narrowing price gap which China’s exporters had identified between domestic and export prices.
Last month’s result meant that over January to October, China shipped 26.9 million tonnes of flat steel products abroad, which was lower by 18.7% on year, the GACC data showed. However, the pace of the decline was fractionally slower than the 19% on-year drop over January-September, Mysteel Global notes.
The volume of Chinese flat steel sailing abroad over the past two months picked up mainly thanks to the demand recovery overseas from this year’s second half which global supply had failed to match, industry sources explained. This imbalance resulted in a surge in international steel prices, and Chinese domestic prices became more competitive internationally, they told Mysteel Global.
Moreover, exports during this quarter are expected to recover further. “The actual export volume in Q4 is very likely to strengthen further, based on the orders we have concluded during the past two months,” a Shanghai-based trader remarked.
Though the China Iron & Steel Association had earlier warned that China’s exports of finished steel products would likely decline this year from 2019, the association is now predicting the decline of shipments will recover to 15% on year, thanks to the higher volume for Q4, as reported.
“We have reinforced our offer prices by more than $30/t this month, but some overseas buyers seem to taking a wait-and-see stance for now amid the surge in prices – even though actual demand still exists,” she continued, admitting that the orders she had concluded last week showed some signs of price weakness surfacing.
Mysteel’s data shows that the export price of SS400 4.75mm hot-rolled coil had increased $53/t on month or $15/t on week to $564/t FOB Tianjin port in North China as of November 26. Global prices have also witnessed significant rises, with SteelMint’s Indian HRC (SAE 1006) export index for example, gaining by $27/t on week to $568/t on FOB basis in the past week.
A Taiwan-based market source told Mysteel Global that demand from Europe and North America is still robust as the supply gap remains. Also, manufacturing sectors in these markets have recovered significantly since October.
Regarding long products, exports of Chinese steel bar declined 2.1% on month to 470,000 tonnes last month, which took total exports over the first ten months to 5.8 million tonnes, down 31% on year, the GACC statistics showed.
At the same time, exports of angles and sections gained 35.3% on month to 230,000 tonnes last month, with shipments abroad over January-October totalling 2.3 million tonnes, representing a decline of 16.3% on year.
In October alone, China’s wire rod exports reached 170,000 tonnes for a decline of 10.5% on month. Over January-October, total rod exports decreased 4.9% on year to 1.5 million tonnes, according to the GACC data.
Written by Anna Wu, wub@mysteel.com
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.
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