China’s steel exports rose by 16.5pc to 7.54mn mt in March from the prior year, which is a four-year high. In Q1 (Jan-March), exports rose by 23.8pc to 17.68mn mt, according to Chinese customs data. Most mills increased exports in Q1 amid weak domestic demand and high production levels.
Steel exports averaged at 5.07mn mt during January-February which rose further in March. Customs announced combined data for January and February when long Lunar New Year holidays reduce production and consumption. Chinese steel prices softened ahead of the Lunar holidays creating room for exports to pick up as steel demand from overseas buyers remained bullish.
The recent discussions around the reduction of export tax rebates also spurred exports. A decision on the rate of the rebate is expected by the end of April. With stricter production curbs, Chinese mills have withdrawn export offers and are focused on fulfilling domestic demand, which could result in a drop in exports and an increase in imports in April.
Finished flat steel demand remained bullish compared to long steel as the resurgence of COVID-19 in Asian countries impacted demand from the construction sector. In line with strong global cues, HRC prices in China hit a decade’s high up by $180-200/mt in March and could reach $1,000/mt ex-works in the coming days, as per market participants.
In March, China’s finished steel imports rose by 16pc to 1.32mn mt from the prior year. Semi-finished steel including billet imports witnessed a sharp rise, however, it is not included in the above data.
In Q1 2021, China imported 3.72mn mt of finished steel, up 17pc from the same period the prior year. It had imported 2.39mn mt of steel over January-February.
CISA anticipates that imports would remain bullish in 2021 amid strong infrastructure investment. Daily crude steel output at major steel mills in China stood at 2.3mn mt in the first 10 days of April, according to the China Iron and Steel Association, up 2.9pc from end-March and having jumped 16.9pc from the prior year.