China: Steel exports grow by 15% y-o-y in Aug'24

China's steel exports increased by 14.7% y-o-y to 9.5 million tonnes (mnt) in August 2024 against 8.3 mnt in August 2023, as per the General Administration of Customs. In January-August 2024, exports rose by 20.6% y-o-y to 70.58 mnt as compared to 59.46 mnt in the same period of the previous year.

Additionally, the export volume surged by 21% m-o-m in August, compared to 7.82 mnt in July 2024.

Factors driving China's steel exports

Weaker domestic market: Domestic steel demand in China remained weak during August. This was primarily due to the ongoing slowdown in the country's real estate sector, which is a major consumer of steel. Government restrictions on developer financing have weighed heavily on the market, reducing demand for steel products such as H-beams and rebars. As a result, steel prices have been on a downtrend, putting pressure on the global steel market.

Competitive export offers: China's steel export offers remained lower compared to those from other regions. For instance, China's steel export offers in July stood at $474/tonne (t) FOB, whereas Japanese offers were at $525/t FOB. This competitive pricing has boosted China's steel export volumes. Meanwhile, Indian steel producers concentrated on domestic demand in August, resulting in a decline in their export volumes.

Outlook

China's steel exports are likely to remain robust in the near term, driven by its competitive pricing and the ongoing weakness in the domestic market. However, several factors could pose potential challenges. Rising global interest rates and economic uncertainties could dampen demand for steel products in key export markets. Additionally, increasing protectionism among importing countries could limit China's export growth.