Pig iron imports into China were recorded at 1.23 million tonnes (mn t) in the first half of CY’21 (Jan-Jun’21), a fall of 37.2% y-o-y as compared to 1.96 mn t seen in the corresponding period last year (CPLY), SteelMint’s customs data reveals.
Imports in Jan’21 stood at 495,379 t. However, in the latter months, the volumes kept on decreasing, mainly due to decline in shipments from Brazil, Ukraine and Russia. In Jun’21, imports were recorded at 43,341 t, the lowest in H1, down by a sizeable 93% y-o-y and 53% m-o-m. Oman and Indonesia were the only exporters to China in the last month.
Brazil, Russia retain top exporters’ spot in H1
Brazil and Russia retained their top exporters’ position in H1CY’21. Brazil’s pig iron exports to China stood at 436,313 t during the period, down significantly, mainly due to lower Chinese demand. Russia exported 343,632 t of pig iron to China in the period under review, slightly up by 2.7% y-o-y.
Interestingly, India emerged as the third largest pig iron exporter in H1 at 169,252 t, overtaking Ukraine, with 95,000 t.
China’s sourcing of domestic pig iron increases
As per SteelMint data, China’s combined pig iron import volumes in May-Jun’21 amounted to 135,199 t, a decrease of 17% as compared to 163,244 t in Apr’21 alone. This was mainly because most of the Chinese steelmakers chose to procure pig iron from the domestic market to meet their operational requirements rather than import amidst stricter steel production controls in China during these months.
Outlook
With tight production cuts in China which are likely to continue into H2CY’21, the country’s pig iron imports in the near term are expected to slow down as the Chinese steelmakers are looking at the domestic market for sourcing pig iron. Also, demand is likely to take a hit in the monsoon.
Further, China’s Tariff Commission of the State Council also raised the export tax on high-purity pig iron to 20% from the existing 15% effective 1 Aug’21.
As per news, Russia’s pig iron exports would have been subjected to a $115/t or 15% — whichever is higher — export tariff. However, the Russian government has now reduced the $115/t rate to $54/t, but has left the 15% tax floor unchanged. For this reason, market sources feel the actual tariff will be lower by only $25-$30/t and not by $61/t. Hence, it would be interesting to see how market dynamics pan out in the near term.
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