China's steel exports up 8% m-o-m in Nov'22

China's steel exports rose by 8% o 5.59 million tonnes (mnt) in November 2022 as compared with 5.18 mnt in the previous month, according to the China's General Administration of Customs. On a yearly basis, export volumes increased by 28% as against 4.36 mnt seen in November 2021.

During the first eleven months of CY22 (January-November 2022), exports were recorded at 61.95 mnt, largely stable from 61.88 mnt in the corresponding period last year.

Key reasons for increase of exports volumes-

1. Weak domestic demand: China's domestic steel demand remained weak amid slack season for consumption coupled with restrictions imposed due to rising number of Covid cases in various parts of the country. This made steelmakers to shift to the exports market.

However, the government's efforts to support steel demand by introducing rescue package for the real estate sector are likely to keep prices supported in the near term.

In addition, leading steel producer has slashed its monthly HRC prices by RMB 100/t ($14/t) m-o-m for December 2022 sales.

2. Lucaritve offers against other exporting nations: Imported HRC offers to Vietnam from China were heard at around $550-560/t CFR in late-October 2022, reaching to a 2-year low level. Offers from other exporting nations like Japan, India, Russia and South Korea were inconsistent at that time. For instance, India's offers were at $600-610/t CFR Vietnam and Japan's indications were at $560/t CFR.

Outlook
SteelMint expects China's exports to drop in 2022 to 60-62 mnt against 66 mnt in 2021. The Chinese government is discouraging exports of commercial grade steel, focusing instead on high grade/high value materials.