Chinese traders plan to continue steel supplies via the Red Sea

Suppliers from China plan to continue shipping steel through the Red Sea, despite the fact that on March 6, a ship carrying Chinese steel products to Saudi Arabia was attacked. This was reported by S&P Global with reference to local traders.

According to the agency, the True Confidence vessel was transporting more than 42 thousand tons of steel from Tianjin (China) to Jeddah (Saudi Arabia). This was the first Houthi attack on Chinese steel exports and the first fatal attack in the Red Sea (three crew members were killed).

Following the attack, Chinese traders expect freight and insurance costs on the route to rise.

Chinese steel exports are growing due to weak domestic demand amid the troubled real estate sector. According to the latest Chinese customs data, in 2023, China’s rolled steel exports increased by 36.2% y/y – to 90.26 million tons, the highest level in six years.

One of the key destinations was the Middle East. According to CEIC research company, the 10 largest importing countries of Chinese steel in the region increased its supply by 53% y/y last year to 10.9 million tons. Exports of steel products from China to Saudi Arabia in 2023 increased by 30% compared to 2022 to about 3 million tons.

According to S&P Global, the True Confidence is a Barbados-flagged vessel previously owned by the American Oaktree Capital. Currently, it is operated by Greek Third January Maritime and managed by Hong Kong-based Fleet Management, but the current owner has not been identified.

As GMK Center reported earlier, last December, a vessel carrying about 40 thousand tons of steel coils from the Korean steel producer POSCO (the business is carried out through the Samsung trading company) was hijacked off the coast of Somalia. The products on board the Maltese-flagged Ruen vessel were intended for a number of Turkish buyers.