China increased steel export by 31.3% y/y in January-June

In January-June 2023, Chinese steel companies increased the export of steel products by 31.3% compared to the same period in 2022 – up to 43.58 million tons. This is evidenced by the data of the China Iron and Steel Association (CISA).

In June 2023, Chinese steelmakers shipped 7.51 million tons of steel for export, which is 10.1% less compared to May. Thus, the dynamics of exports in monthly comparison fell for the first time since the last 5 months. Compared to June 2022, the indicator increased by 12.1%. The average export price in June amounted to $892.4/t, which is $29.9/t or 3.2% less m/m.

Steel imports to China in January-June 2023 amounted to 3.74 million tons, which is 35.2% less compared to the same period in 2022. In June, Chinese consumers reduced imports of steel products by 3% compared to May 2023 and by 39.8% compared to June 2022, to 612 thousand tons.

The average steel import price in June amounted to $1,661.4/t, down 4.4% from the previous month.

High steel exports from China in the first half of the year are caused by low prices for steel products compared to other exporting countries, as well as low domestic demand, which forces domestic producers to send remaining products abroad.

The main volumes of steel are exported to regions where there are no trade barriers, in particular, Southeast Asia, the Middle East, South Asia, Central America, etc.

Domestic demand for steel products is still very low amid weak consumption in the construction industry. Exports showed growth during February-May, but began to decline in June, probably due to a reduction in steel production amid government pressure, as well as slowdown in demand abroad, as countries struggle with inflation and a decrease in purchasing power.

In 2023, China is expected to increase exports of steel by 10% y/y – to more than 72 million tons. That is, in the second half of the year, export volumes will gradually decrease in monthly dynamics, although they will be higher than in 2022.

As GMK Center reported earlier, China in January-May 2023 increased steel production by 1.6% compared to the same period in 2022 – up to 445 million tons. In May, Chinese steelmakers produced 90.12 million tons of steel, which is 7.4% less compared to May last year.

Steelmakers in China are expected to face more pressure in the second half of the year as the Chinese government announced plans to cut steel production from 2022.