China increased the export of steel products by 28.4% y/y in January-August

In August, Chinese steel companies shipped 13.3% more steel abroad than in July

In January-August 2023, Chinese steel companies increased the export of steel products by 28.4% compared to the same period in 2022 – up to 58.78 million tons. This is evidenced by the data of the China Iron and Steel Association (CISA).

In August 2023, China’s steelmakers shipped 8.28 million tons of steel for export, which is 13.3% more than in July. Compared to August 2022, the indicator fell by 13.9%. The average export price in August was $810.7/t, which is $56.3/t or 6.5% less month-on-month.

In January-August 2023, steel imports to China amounted to 5.06 million tons, which is 32.1% less than in the same period of 2022. In August, Chinese consumers reduced imports of steel products by 5.6% compared to July of this year, and by 28% compared to August 2022 – to 640,000 tons.

The average price of steel imports in August was $1669.2/t, increasing by 4.2% compared to the previous month.

The high indicators of steel exports from China 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 the remaining products abroad.

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

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

It is expected that in 2023 China will 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 than in May last year.

China’s steel production is expected to face more pressure in the second half of the year as the country’s government announced plans to cut steel output from 2022.