China's flat steel exports in May'20 plunge 28% on year

China's flat steel exports suffered a 27.5% on-year fall in May to reach 2.5 mn t, down from 4.1 mn t in April, according to the latest statistics from China's General Administration of Customs (GACC) published on June 24. Chinese traders blamed the impact the pandemic continues to have on overseas flat-steel demand.

Last month's result led China's flat steel exports over January-May to decline by 12% on year to 15.4 mn t, steeper than the 8.2% on-year decline seen in the first four months, the statistics showed.

The tonnage shipped out in May was from orders signed a couple of months earlier, a Shanghai-based steel exporter noted. "Global steel demand in March and April was extremely weak given the COVID-19 outbreak, while domestic steelmakers opted to hold onto their export offer prices as domestic steel prices were strengthening with the resumption of operations in China," she added.

"Overseas demand in markets such as Southeast Asia has been picking up slightly of late, but our prices are still not very competitive," Mysteel Global was told.

The offer price from Chinese mills for SS400 4.75mm hot-rolled coil (HRC) reached $414/t on May 29 in terms of FOB Bayuquan port, Northeast China's Liaoning province, up $14/t on month. The price increased further to $436/t as of June 23, according to Mysteel's assessment among Chinese exporters including traders and steel mills.

In the Chinese domestic market, the price of Q235 4.75mm HRC surged by Yuan 266/t ($37.7/t) on month to Yuan 3,673/t including the 13% VAT as of May 29, before rising further to top Yuan 3,794/t as of June 23, Mysteel's data showed. Propelling prices upwards was mainly the rapidly growing demand from infrastructure projects and from downstream industries which are recovering from the virus contagion.

The exports of steel bar decreased 11.5% on year to 690,000 t in May, which took the total exports to 3.55 mn t over January-May, down by 26.8% on year, according to the statistics. At the same time, exports for angles and sections reached just 200,000 t last month, down 40.8% on year, with shipments abroad over the first five months totalling 1.4 mn t, representing a decline of 2.4% on year.

In May alone, China's wire rod exports reached 170,000 t for a decline of 11.5% on year. Over January-May, total rod exports decreased 11.4% on year to 750,000 t, the GACC data show.

This article has been published under an article exchange agreement between Mysteel Global and SteelMint.