Posted on 14 Oct 2021
China's steel exports slowed in September to the lowest level since December 2020 following the country's export control polices, as well as weaker southeast Asian demand because of its Covid-19 lockdowns.
Most September steel export shipments were spot orders taken in July and early August with China tightening polices to limit exports. China's government instructed steel mills to flatten exports in July. To further limit producers' steel supplies to overseas countries, China cancelled value-added tax rebates from 1 August for exports of cold-rolled coil, hot-dipped galvanised steel coil and sheets, electro-galvanised steel coils and sheet, silicon steel and rail steel.
Southeast Asian steel demand was also crippled by the spread of the Delta variant of Covid-19. Vietnam, the region's largest buyer of Chinese steel, entered a lockdown from 23 August. Manila in the Philippines was in lockdown during most of July and August.
China's steel exports in October are likely to shrink further with China tightening polices to limit domestic steel output. China Iron and Steel Association member mills' cut output to 1.7688mn t/d over 21-30 September, the lowest level since March 2018, as curbs deepen from power cuts, maintenance and other restrictions.
Production cuts also drove Chinese domestic steel prices higher and dampened producers' export interest further. The Argus Shanghai ex-warehouse prices for rebar rose by 1,090 yuan/t, or 22.4pc, to Yn5,950/t from 1 July to 11 October. The Argus Shanghai ex-warehouse prices for hot-rolled coil rose by Yn350/t, or 6.4pc, to Yn5,850/t in the same period.
China's imports of steel products rose by 18.2pc compared with August to 1.256mn t in September. China imported 10.72mn t of steel during January-September, down by 28.9pc from a year earlier.
Source:Argus
