China's steel exports drop nearly 7%, y-o-y, in Jan-July'22

China's steel exports fell 6.9% y-o-y to 40.073 million tonnes (mnt) in January-July, 2022, according to China's General Administration of Customs. On monthly basis, exports fell 12% to 6.671 mnt in July as against 7.56 mnt in June. However, exports rose 17.7% y-o-y against 5.67 mnt in July 2021.

Factors impacting exports

1. Falling global steel prices: China's HRC export offers stood at $623/t FOB China in July compared with $729/t FOB a month ago. Similarly, export offers from key exporting countries fell sharply during the period. For instance, India's HRC export offers were at $617/t FOB (down 12% m-o-m) and Japan's offers were at $656/t FOB (down 15% m-o-m) in July versus June.

Demand from major importing countries such as Vietnam remained subdued as buyers preferred domestic material over imports. China's steel exports to Vietnam fell by 19% y-o-y to 2.96 mnt in the first seven months of this year compared with 3.66 mnt in the same period year ago.

2. Crude steel production down 6.5% y-o-y: China's crude steel production decreased by 6.5% y-o-y to 526.88 mnt during the period under review. Furthermore, it is anticipated that output will fall in the second half of CY'22 in line with National Development and Reform Commission (NDRC) policy which mandates that China's production shall be lower than 1.033 billion tonnes (bnt) in CY'21.