Chinese Steel Exports Fall 16% in Q1 CY20 on High Offers and Pandemic Outbreak

The nation's finished steel export volumes plunged by 16% in (Jan-Mar) Q1 CY '20 and aggregated to 14.29 MnT in contrast with 17.02 MnT in Q1 CY'19.

Below mentioned reasons can be attributed to the decline in the export volumes-

1.Coronavirus outbreak- The Novel Coronavirus commenced from the Wuhan city of Hubei province and the lock-down was officially announced by the government in late Jan during the nation's Lunar New year holidays. Thus, strict restrictions on transportation and logistics and other industry-related activities resulted in delayed resumption and decline in export volumes this quarter.

2.Extended Lunar New Year holidays- In the month of Jan'20 Chinese steelmakers witnessed week-long Lunar New year holidays which impacted trade activities and lower export volumes to overseas nations

3.Increased competition in the overseas market-In the mid of March'20, the global HRC prices started to decline in the overseas market and China lost its competitive advantage to India and Russia since they started to offer aggressively to Vietnam importers at lower prices.

4. Lockdown announced across globe-Unlike China, other nations across the globe announced a nation-wide lock-down to prevent the spread of COVID-19 and in turn weighed on the nation's export volumes.

China HRC export offers in Q1CY20 vs Q4CY20-The nation's export offers in Q1 CY'20 stood at USD 475/MT FoB China basis, up by USD 16/MT as against USD 459/MT FoB basis in the previous quarter.

Finished steel imports increased by 10% in Q1 CY'20-The nation's steel imports ascended by 10% in Q1 CY'20 and summed up to 3.18 MnT, which was 2.90 MnT in Q1 CY'19.The country has been importing steel amid competitive offers than in domestic market