Posted on 10 May 2021
China exported 25.7 million tonnes of finished steel over January-April, up 24.5% on year, and imports totalled 4.9 million tonnes over the same period, up 16.9% on year, the latest statistics from China’s General Administration of Customs (GACC) published on May 7 showed, with the growth rates largely the same as during first quarter.
As a result, China remained a net steel exporter over the first four months of this year. In April alone, steel exports approximated 8 million tonnes, up further from 7.5 million tonnes in March or refreshing a monthly high since November 2016, according to GACC’s data. On the other hand, April’s imports declined from 1.3 million tonnes in March to 1.2 million tonnes.
The export volume in April reflected the strong overseas demand and high export prices since Chinese New Year in late February, sources noted. But the April jump was also due to the fact that many Chinese exporters rushed to ship their products abroad before Beijing made any adjustment to tax rebates on steel exports, as Mysteel Global reported.
On April 28, the Ministry of Finance announced that 146 steel products would see their tax rebates removed (most of which were around 13%) effective from May 1, finally giving steel foreign trade participants the clarity they had been seeking for nearly half a year. The intention behind the policy adjustment is to keep more steel inside the country in order to bridge any supply gap, given that the country is determined to cut domestic steel output this year, as reported.
Nevertheless, even with all the rebates removed, profit-driven Chinese steelmakers and traders have still been busy shipping their products out to the rest of the world, as the GACC statistics show. Export prices are so high that exporters can cover their losses from the rebate removal and yet still have margin left for a handsome profit, market sources indicated.
“The trading is good. With the policy finally settled, we have nothing to worry about anymore,” an official with a mill based in Northeast China said, admitting to Mysteel Global that export prices are currently higher than those for domestic sales.
“The profits for flat products are just too high,” he said.
As of May 6, the transaction price of Chinese-origin SS400 4.75mm hot-rolled coil (HRC) was $941/tonne, FOB at North China’s Tianjin port, while in the home market, the national price of Q235 4.75mm HRC was Yuan 5,952/t ($920/t) including the 13% VAT, according to Mysteel’s assessment.
Source:Mysteel Global
