China: Steel exports rise 7% y-o-y in July'24

Chinese steel exports increased 7.1% y-o-y to 7.82 million tonnes (mnt) in July 2024 against 7.31 mnt in July 2023, as per General Administration of Customs. In January-July 2024, exports surged 21.8% y-o-y to 61.22 mnt against 50.27 mnt in the same period of previous year.

However, on m-o-m basis, exports declined by 11% compared to 8.75 mnt.

Factors driving steel exports

Slow domestic market sentiment: The Chinese domestic market experienced a downturn as a result of declining steel demand, which was further aggravated by the negative impact of heavy rains and heatwaves. SHFE HRC futures witnessed persistent volatility throughout the month.

Competitive export offers: China's steel export offers are lower compared to other origins. For instance, China's steel export offers in July stood at $506/t FOB. Whereas, Japanese offers were at $540/t FOB. China's lower export prices compared to competitors led to increased export volumes. Moreover, Indian steel mills focused on domestic demand, thereby limiting exports.

Outlook

China's steel exports are expected to remain high in the near term due to competitive pricing and weak domestic demand. However, a potential economic recovery in China may lead to increased domestic steel consumption, reducing export volumes. The speed of China's economic rebound will be crucial in determining the future of its steel exports.