China's steel export and its impact on ASEAN countries.

Posted on 23 December 2009
 

Source: SEAISI
China's export of finished steel products decreased significantly in 2009. Semi finished steel product export dropped from 1 million tonnes in the first three quarters of 2008 to below 10,000 tonnes in the same period of 2009. Export of finished steel product slashed by 70% y-o-y to 14.6 million tonnes for the period January to September 2009. However, export of finished steel products was seen to pick up sharply by 58% q-o-q to 5.98 million tonnes in the third quarter of 2009. As reported by many sources, export volume continued to rise till November 2009. This could be a result of over supply pressure in the country. It was reported that the steel inventory level in China picked up significantly in the second half of 2009. Although there were signs that some major steelmakers started to cut their steel production from the third quarter, reports showed that the monthly drop of less than 5% was not expected to have much impact.

According to Metal Bulletin, China's domestic steel price has picked up significantly since November 2009. Meanwhile, export price saw less fluctuation and remained at relatively lower level. Southern China's domestic rebar price registered 591 USD per tonne in the middle of December 2009 (1 USD = 6.8 RMB), while Eastern China's price was 529 USD per tonne. Rebar export price (FOB) from China was 540 USD per tonne. Southern domestic wire rod price was 558 USD per tonne in December 2009, higher than the price sold in eastern China which was 534 USD per tonne. Export price of wire rod registered 523 USD per tonne. Southern domestic price of hot rolled coil was 557 USD per tonne, while eastern price registered 540 USD per tonne. However, export price was recorded to be lower at 515 USD per tonne.


Export of section rose by 21% in the third quarter of 2009 to 399,000 tonnes, when compared to the second quarter. Export of bar and wire rod picked up by 44% and 35% q-o-q to 340,000 tonnes and 264,000 tonnes, respectively.



For flat steel products, export of plate in the third quarter of 2009 doubled in volume to 903,000 tonnes. Hot rolled coils export rose from 342,000 tonnes in the second quarter of 2009 to 903,000 tonnes in the third quarter. Most of the volume was accounted by the export of hot rolled carbon coil, which increased by more than five folds when compared to the volume in the previous quarter. Export of cold rolled carbon sheet surged by three folds to 224,000 tonnes in the third quarter of 2009. Cold rolled stainless steel export increased by 50% to 86,000 tonnes.
For coated steel products, the volume increased substantially as well. Export of hot dipped galvanized sheet rose by more than two folds to 340,000 tonnes. Electro-galvanized sheet export was not significant, but the volume picked up substantially by 67% to 30,000 tonnes. Export of tin plate and tin free product continued to increase significantly since 2006.Tin plate export at127,000 tonnes in the third quarter of 2009 represented an increase of 38% q-o-q while tin free export rose by 50% to 19,000 tonnes. Colour coated sheet export jumped from 189,000 tonnes in the second quarter of 2009 to 315,000 tonnes in the third quarter.


ASEAN member countries are facing the problem of cheap steel products from China as the region is one of its major export destinations. Approximate 17% of the total export of steel products from China was shipped to the ASEAN countries between January and September 2009. However, the export volume from China to ASEAN countries surged significantly in the third quarter of 2009 and accounted for 26% of China's total export.

Export of section to ASEAN increased by more than two folds to 120,000 tonnes in the third quarter of 2009 when compared to the previous quarter, most of which was to Singapore, Malaysia and Philippines. Export of bar to ASEAN at 79,000 tonnes was a significant increase of 2.5 times of the volume in the previous quarter. Major destinations were Indonesia and Thailand, at 26,000 tonnes each.

Wire rod export jumped sharply from 12,000 tonnes in the second quarter of 2009 to 79,000 tonnes in the third quarter. Thailand and Vietnam were the major destination in the region with export volume of 35,000 tonnes and 30,000 tonnes, respectively, a significant increase from the volume of less than 5,000 tonnes for each country in the previous quarter.

Export of hot rolled plate soared from 42,000 tonnes in the second quarter of 2009 to 265,000 tonnes in the third quarter. 77% of the volume was to Vietnam, while export to Singapore and Philippines also increased dramatically to 30,000 tonnes and 17,000 tonnes, respectively. Similarly, export of hot rolled carbon sheet surged from 11,000 tonnes in the second quarter of 2009 to 288,000 tonnes in the third quarter. Export to Vietnam jumped to 262,000 tonnes in the same period while export to other countries in the region was less than 10,000 tonnes.

Similarly, export of cold rolled carbon sheet rose significantly by more than six folds to 126,000 tonnes in the third quarter, when compared to the second quarter. The export went to various countries in the region. Vietnam was the main destination in the region with total volume of 50,000 tonnes, an increase of nearly nine folds in the third quarter, when compared to the previous quarter. Export to Indonesia surged by eight folds to 24,000 tonnes, followed by export to Philippines and Thailand at 19,000 tonnes and 18,000 tonnes, respectively. Export of cold rolled stainless steel sheet doubled in volume in the third quarter to 20,000 tonnes, when compared to the previous quarter.

Export of coated steel sheet registered a significant growth rate as well, albeit at a relatively lower rate when compared to other products. Export of hot dipped galvanized sheet rose by two folds to 83,000 tonnes. Major destinations were Thailand, Vietnam and Philippines, at 24,000 tonnes, 21,000 tonnes and 15,000 tonnes, respectively. Export of electro galvanized sheet was not significant although the volume doubled to 6,000 tonnes in the third quarter.

Export of tin plate continued to pick up since the second quarter of 2009. Total volume in the third quarter, at 39,000 tonnes, registered a significant increase of 77% from the previous quarter. Meanwhile, export of tin free sheet remained at a low level. Export of galvalume sheet (ZnAl) surged by six folds to 16,000 tonnes. Major destinations were Thailand and Malaysia.

Vietnam was particularly affected by the flood of colour coated export from China, with total volume of 18,000 tonnes in the third quarter, a sharp increase from 6,000 tonnes in the second quarter. Surprisingly, export to Singapore declined from 11,000 tonnes in the second quarter to 9,000 tonnes in the third quarter. Total export of color coated to the region registered 41,000 tonnes.

China's export of pipe and tubes remained significant and has been on the increasing  trend since 2005. Export of seamless pipe remained buoyant, while export of welded pipe declined significantly in early 2009.



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