China’s Steel Industry Performance: Q1 CY16 Vs Q2 CY16

Chinese steel industry have shown signs of improvement in the second quarter of CY16 against its previous quarter.

The country’s raw material, semis, and finished steel domestic and export prices which have been falling since past one year have underwent reasonable increase in Q2 CY16.

From late Mar’16 till early May’16, there was sudden plunge in country’s domestic steel prices amid bullish sentiments resulting in increase in semis and raw material prices.

Although from latter half of May, prices started retreating, they didn’t touch the lower levels of first quarter.

We at SteelMint have analyzed and compared the China’s steel industry performance in Q1 CY16 and Q2 CY16.

Prices: 

In Q2 FY16, China’s coking coal import prices increased by 19% whereas, met coke export prices surged by 41% against previous quarter.

Country’s iron ore import prices were up by 15% on an average basis against first quarter.

In case of semis, China’s domestic billet prices were up by 12%. Whereas, its export prices increased by 32% against previous quarter.

Country’s long and flat products domestic prices were up in the range of 15% to 25% in Q2 FY16. While both products export prices increased by 23% and 27% respectively.

Production: 

China’s crude steel output is up by about 9% in second quarter of CY16. With increase in prices during late Mar’16 till early May’16 period, domestic steel makers increased their crude steel output. However, in order to curtail country’s steel overcapacity, Chinese government is now adopting aggressive measures by setting up annual targets to cut production. The country plans to cut its steel capacity by 100-150 MnT in next five years.

Export/Import: 

In terms of imports, highest increase is registered in imports of manganese ore and coking coal whose imports increased by 47% and 29% respectively in second quarter of current year. While in terms of exports, country’s met coke exports have registered a fall of 31% in Q2 CY16 against Q1 CY16. The country is making serious efforts to cut its coal capacity also. It has laid out a plan to cut its coal capacity by 500 MnT in next five years.

China’s Steel Prices Q1 CY16 vs Q2 CY16

Source: SteelMint Research

China’s Import-Export Q1 CY16 vs Q2 CY16

Source: SteelMint Research