China: Finished steel exports decline by 14% during Jan-May'20

Chinese finished steel exports during the first five months of CY'20 (Jan-May'20) fell by 14% Y-o-Y to 25.002 MnT as compared to 29.05 MnT in Jan- May'19, as per recent data released by General Administration of China's Customs (GAC).

Fall in the nation's export volumes was due to the following reasons:

Improved domestic demand: Strong futures and domestic steel prices in the nation gained momentum. Thus, Chinese steelmakers were more interested in domestic sales than exports to overseas markets.

Increased appetite for imports on lower inventories: Steel production cuts in Northern China to curb the air pollution resulted in limited inventories. Due to cheaper HRC offers from other nations, Chinese steel mills shifted their focus to imports, and aggressively procured billets and HRC from India which resulted in fall in export volumes.

Competitive offers from other countries: Indian steel mills aggressively exported HRC to Vietnam and China amid lockdown announced in the domestic market. Thus cheaper HRC export offers from India and CIS nations, in turn, led to a decline in the Chinese steel export volumes in May'20.

As per data maintained with SteelMint, Chineses HRC export offers stood at USD 418/MT FoB basis in May'20 as compared to USD 406/MT FoB basis in Apr'20. However, importers based in Vietnam are looking for cheaper HRC alternatives due to which they are not importing much from China.