Chinese steel product exports unlikely to dive down in H2

Posted on 07 August 2007

Source: August 7, 2007

It is reported that though China Iron & Steel Association has recently forecasted that steel product exports is possible to show sharp YoY decline of 60% during the H2 but many insiders present at 2007 China Steel Investment Seminar thought that steel product exports are able to come back to a comparatively high level from July to December 2007 because of the strong demand in international markets.

Mr Jia Yinsong deputy director general of the China's National Development & Regulation Commission said that "One of the remarkable situations is that during January to June 2007, steel product exports amounted to 33.79 million tonnes up by 97.7%YoY. At the same time these steel products are valued at some USD 22.399 billion up by 136.4%YoY. This demonstrates that China's steel product export price is higher this year. Therefore, rising costs for steel exports caused by export rebate cut can be passed on to downstream buyers owing to rigid demand from international market."

Mr Jim Jia CEO of Mysteel said that based on crude steel outputs during the H1 China is expected to produce 490 million tonnes of crude steel in 2007 up by 70 million tonnes YoY. He added that steel product exports would rebound up during the last four months and China's net steel export will exceed 45 million tonnes this year.

IMF has recently upward revised its forecasts on economy growth during these two years, indicating that international demand for steel will remain prosperous. Under such circumstances, slim room is imagined for further decline on China's steel product export during the second half. Besides, constantly rising prices for raw materials will underline international steel prices.

A senior official from CISA said that steel product exports should account for some 10% of the nation's total outputs. However, the ratio surged to hit 13% during H1.


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