China: Steel exports fall amid strong domestic demand

China's steel exports fell by 25% y-o-y to 4.18 mn t as robust domestic demand curbed overseas sales volumes, while higher export prices also led to lower interest in Chinese cargoes in major importing nations.

Cumulative Jan-July exports were at 32.871 mn t, down by 18% from 39.974 mn t in the same time frame of CY '19, according to customs data.

Higher HRC export offers- HRC export offers were at $460/t FoB China in Jul '20, up from $440/t FoB in Jun '20, slowing sales into Vietnam. Competitive offers from India, Japan, Russia, and South Korea reduce Chinese export volumes.

Nation's steel exports increased m-o-m basis- In July volumes were, however, 13% higher m-o-m as more mills had ramped up output in the late-May/June period when July shipments were booked compared with late-April/May period when June cargoes were booked.

Outlook: China's export volumes may remain low in the near-term as major steel producers are seeking to export excess supplies into overseas markets as steel demand in the non-China world remains gloomy. Also, strict enforcement of sintering and blast furnace restrictions in China's steelmaking hub, Tangshan, from 1 Jul '20- 30 Sep '20 can also curb steel output and export offer volumes.