Chinese finished steel export volumes increased by 5% m-o-m to 4.04 mn t in Oct ’20 against 3.85 mn t in Sep ’20, as per the recent data released by the General Administration of Customs.
Reasons behind the increase in exports volumes-
- Absence of Indian cargoes in the global market- Indian steel mills are less interested in export on better realizations in the domestic market. Thus, importers based in Vietnam remained active in procuring HRC from China.
- Fall in domestic steel prices- Domestic HRC prices towards the beginning of Oct ’20 was recorded at RMB 3,940-3,960/t which fell to RMB 3,780-3,830/t ex-Tangshan towards month-end.
However, the export volumes declined by 15% annually in comparison with 4.78 mn t in Oct ’19.
Also, in Jan-Oct CY ’20, the export volumes recorded a 19% decline to 44.42 mn t, which was 54.81 mn t in CPLY.
Outlook- Steel export volumes might soften in the near term on robust demand in the domestic market on improved profit margins. Also, fear that the spread of coronavirus in overseas markets could slow the trades in the upcoming months. The Tangshan govt has announced fresh production curbs until Mar ’21. In addition to this, the increasing domestic steel capacity in Vietnam might lower their reliance on HRC imports from China.
Leave a Reply