Chinese steel exports dropped in August amid high domestic demand and lower steel consumption in importer countries as COVID-19 continued to hurt economies. In August, China’s total steel exports hit a seven-month low at 3.678mn mt, a drop of 11.9pc or 498,000mt from the prior month.
In the Jan-Aug period, China exported 36.55mn mt of steel products, down 18.6pc from the prior year period, according to preliminary official customs data.
Chinese steel producers held offers high in the export market and maintained a gap of at least $20/mt in against imported steel prices, allowing many Chinese traders and even producers to buy imported steel products and resell them in China. Billet importers took advantage of the arbitrage opportunity during the same period, learnt Davis Index from sources.
On the other hand, they booked steel products such as HRC and billets aggressively from Asian suppliers like India, Vietnam to benefit from the price discount. These countries were forced to export at lower price amid a plunge in domestic demand due to the pandemic as China was the only destination where steel demand remained strong. Chinese demand has recovered to pre-COVID-19 levels supporting domestic prices to maintain a successive uptrend since March.
Imports
China’s finished steel imports dipped by 13.8pc or 366,000mt to 2.24mn mt from July. Steel imports of 2.6mn mt in July were at a record high. In the Jan-Aug period, steel imports totalled 12.189mn mt, up by 59.6pc from the prior year period.
Iron ore imports drop
In August, China imported 100.36mn mt of iron ore and concentrates, down by 10.9pc from 112.65mn mt in July. Imports rose by 5.8pc from August 2019. The average import price in August was $103.43/mt cfr China, an increase of $6.35/mt cfr from July. There were fewer shipments from big miners amid port congestion. In the Jan-Aug period, China imported a total of 759.91mn mt of iron ore and its concentrates, up 11pc from the prior year.