Review and prospect of Chinese steel import and export in the first half year
Date of Publication:2022-10-09

According to the latest customs statistics, steel exports in the first half of 2011 were 24.33 million tons, an increase of 3.2% year-on-year; Imports were 8.03 million tons, down 4.8 percent year-on-year. As a whole, steel exports are still at a high level of more than 4 million tons, exceeding expectations. Restrained by the weak situation of international steel market, it is expected that the export situation of Chinese steel products in July and August is still not optimistic. The severe export situation will be changed in the fourth quarter. The export of the whole year is expected to reach about 45 million tons, which is helpful to alleviate the domestic steel market supply pressure.

First, the first half of the steel export recovery exceeded expectations

The global economy, especially the major economies, has shown signs of accelerating the pace of economic recovery since March, with the United States and the Eurozone countries in good economic conditions. However, subsequent data showed that the momentum of the US economic recovery began to slow in the second quarter, with inflationary pressure putting a significant damper on domestic demand in the US. Prices in the euro area remain high, member countries are seriously divided, and the European debt crisis is gradually spreading to the core countries of the euro area. The devastating earthquake in Japan in March had some negative impact on the world economy, but Japan unexpectedly posted a trade surplus in June, its first in three months, as production picked up and exports began to pick up. To sum up, global economic recovery slowdown to China's late steel export is also relatively unfavorable.

In terms of the export volume of various varieties, the export of sheet metal has recovered to the level before the financial crisis, while the rod and wire and corner products have been sharply reduced since the outbreak of the financial crisis and are still at a low level. On the one hand, it is related to the sharp reduction of export orders caused by the outbreak of the financial crisis, on the other hand, it is related to the national export policy guidance.

From the monthly import and export data, affected by the domestic Spring Festival factors, steel exports in January and February were less than 3 million tons. Benefiting from the recovery of overseas demand in the first half of this year, China's steel export showed a surge in March. Although the second quarter began to fall for three consecutive months, the current export volume still maintains a high of more than 4 million tons. The overall recovery of steel export is beyond expectations.

Compared with the FIRST half of last year, in the first half of this year, in addition to the hot rolled product exports fell year-on-year, other major products showed a growth trend, among them, cold rolled and galvanized the largest increase, more than 30%, building materials export growth within 15%, medium and thick plate showed a slight increase. Compared with the same period last year, the export volume of medium plate, cold rolled wide steel strip and cold rolled sheet increased by 44.8%, 44.61% and 39.09% respectively, which contributed the most to the recovery of sheet export, while the rest of the sheet varieties declined by different ranges.

In addition to the factors of national export policy orientation, another important factor comes from the competition of major foreign export regions. In the first half of this year, the domestic hot coil demand in South Korea was seriously depressed, and the hot coil manufacturers expanded the export volume. The export volume to Southeast Asia was 990,000 tons, up 67.8 percent year on year. As a result, the competition for export areas is becoming more and more intense.

Throughout the first half of the steel export situation, the international steel market price is rising, overseas demand recovery is the main factor of steel exports in March, after which the overseas demand continues to be depressed, leading to a continuous decline in exports. Since July 15 last year, the export tax rebate policy made exporters concentrate their exports in June and July last year, but the export volume dropped sharply in the following months. Although the retaliatory growth trend was reported in March this year, the export volume still did not exceed the high point of last year. It can be seen that the national export policy guidance has played a crucial role in the export of steel products. From the above analysis, it can be seen that the export of cold rolled products encouraged by the national policy is rising, while the export of hot rolled products and medium and thick plate products is not unexpected to be inhibited.

Two, exports to East Asia, Southeast Asia and other regions of the steel recovery is relatively rapid

Export region by continent, the first half of this year exports to East Asia, Southeast Asia, Europe and North America steel volume has been significantly recovered, among which, South Korea as our export country, still firmly occupy the first position, and the United States rose from the 14th last year to the sixth place. Steel exports to Belgium surged in the first half, up 210 per cent year on year, and now ranks fourth. In addition to the Philippines, exports to other Southeast Asian countries and regions of steel have risen substantially. The surge in steel exports to these regions is largely due to strong domestic demand.

India and Vietnam, while still in second and third place, both saw significant declines compared with the same period last year, with steel exports to India falling the most, by more than 50 per cent, and Vietnam by around 30 per cent. This year, India and Vietnam's domestic production capacity has expanded substantially, which gradually highlights the inhibitory effect on China's steel exports.

But at the same time, steel exports to Belgium, the United States and other Southeast Asian countries and regions are on the rise, leading to an increase in total steel exports. This shows that after the export of some countries blocked, actively looking for other alternative countries is an effective way to maintain steel exports.

3. The average price of steel exports rose sharply

In terms of export prices, China's steel export average price in June was $1,081 / ton, rising for the third consecutive month, up 3.05% from the previous month, but down 28.8% from the previous year. In the first half of the year, the average export price of almost all varieties increased. Specifically, the average export price of cold rolled sheet and cold rolled wide steel strip increased the least, while the average export price of hot rolled thin and wide steel strip increased substantially. In the case of declining export volume, the average export price did not decrease but increased, indicating that the product quality was constantly improving.

From the point of view of the domestic and foreign price gap, with the rise of the international steel price, the domestic and foreign price gap is gradually expanding. In March, the price gap widened to the maximum, and then gradually narrowed with the continued weakness of the international price, making the price advantage of domestic export enterprises gradually lost.

4. Steel imports remained basically stable

Imports, in the first half of the year, the monthly import volume of Chinese steel still maintained at more than 1.3 million tons, down 4.41% compared with the same period last year, overall maintain a stable situation. Among the major steel products, the imports of cold rolled sheet and medium and thick plate products increased substantially in the first half of this year, while the other varieties showed slight increases or decreases.

From the perspective of import average price, compared with the same period last year, except for the extra thick plate slightly decreased, the import average price of the rest of the varieties have a small increase, but the increase compared with the export average price is still small.

This year is the first year of the 12th Five-Year Plan, adjusting import and export tariffs to curb the export of products with high energy consumption and high emissions will be the focus of the export policy of steel products. The weakness of steel exports in the first half of the year reduces the possibility of adjusting export tariffs again in the near future. Considering that the global economic development is still facing many uncertain factors, the recovery of major economies is slowing down, and the price of flat wood in the international market continues to decline, the price advantage of Chinese export enterprises is further weakened. Therefore, it is expected that the situation of Chinese steel export in July and August is not optimistic, but after that, as the peak season of steel consumption gradually comes, the international steel market will pick up and the grim export situation will be improved. The overall maintenance of annual steel exports about 45 million tons of forecast, imports maintain 15 million tons of level.

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