China’s Steel Export to ASEAN-6

Posted on 10 September 2021

China’s steel export to ASEAN-6 reached the highest level of 36 million tonnes in 2016. The export volume dropped significantly to 20 million tonnes in 2017 and the volume gradually declined to 15 million tonnes in 2020. One of the reasons is the government’s discouragement of the low value-added steel export while they encourage export of high value steel through the implementation of export duties and provision of tax rebates. 

China’s export of bar, at 13 million tonnes in 2016, continued to decline to 1.1 million tonnes in 2019 and further declined to 755,000 tonnes in 2020. The significant decline in 2020 could be the impact from covid-19 pandemic. However, the export of bar from China to ASEAN-6 surged 73% y-o-y to 589,713 tonnes in the first four months of 2021. 96% of the export was alloyed bar. Most of alloyed bar export from China to ASEAN-6 is in 72283090 which is ‘Other bars and rods, not further worked than hot-rolled, hot-drawn or extruded, other boron added. 

Half of the alloyed bar export was to Singapore, at 285,009 tonnes, an increase of three folds compared to the same period last year. Export to Indonesia doubled in volume to 103,652 tonnes. 

China’s wire rod export to ASEAN-6 increased 27% y-o-y to 763,902 tonnes in the first four months of 2021. Most of the export is in 72279090, which is ‘other boron added, alloyed wire rod’. Major destinations among ASEAN-6 were Philippines, Thailand, Vietnam and Indonesia, of which the volume registered above 100,000 tonnes in 4 months. 

For flat production, China’s export of hot rolled plates to ASEAN-6 declined moderately, at 6.5% y-o-y to 1.26 million tonnes in the first four months of 2021. Most of the volume is in 72254099 under other boron added, alloyed plates. Among 481,128 tonnes of China’s export of 72254099 plates to ASEAN-6, 65% of which was to Vietnam, followed by the export to Philippines, 81,156 tonnes and Singapore, 38,609 tonnes.  

China’s export of hot rolled coil to ASEAN-6 surged significantly, from 946,202 tonnes in the first four months of 2020 to 2.2 million tonnes in the same period of 2021. Most of the export of alloyed hot rolled coil under 72253000, or other alloyed hot rolled and 85% out of which was the export to Vietnam. 

China’s export of cold rolled coil registered 439,668 tonnes in the first four months of 2021, an increase of 25% y-o-y. Around 60% of the export is carbon CRC, while export of alloyed CRC registered less than 10%. 

The carbon CRC export volume increased significantly by 70% y-o-y to 256,606 tonnes. Major destinations were Philippines and Indonesia. Export of stainless cold rolled sheet was stable at 100,000 tonnes level. Major destinations were Vietnam and Indonesia. Export of alloyed cold rolled sheet was mainly shipped to Indonesia, at 20,874 tonnes, of which the volume declined 33% y-o-y compared to the same period of last year. 

Overall, China’s coated sheet export to ASEAN-6 increased 19% y-o-y to 2.4 million tonnes from January to April 2021. Nearly half of the volume was the export of hot dipped galvanized sheet, at 1.04 million tonnes, a slight decline of 3% y-o-y. Major destinations were Thailand and Vietnam. Export of color coated registered 714,674 tonnes in the first four months of 2021, which was an increase of 38% y-o-y. major destinations were Thailand, Vietnam  and Indonesia. 

As for the export of pipes & tubes into ASEAN-6, the volumed stabilized at 452,946 tonnes in the first four months of 2021. Export of seamless pipes to ASEAN-6 was mainly to Thailand and Indonesia (above 50,000 tonnes in four months) while export to Malaysia, Vietnam and Singapore were about 20,000-28,000 tonnes in the same period. 

Export of welded pipes to ASEAN-6 increased 13.8% y-o-y to 260,500 tonnes from January to April 2021. Major destinations were Indonesia, Singapore and Vietnam. 

China’s Ministry of Finance officially announced that tax rebates on exports of most steel products will be cancelled, with effect from 1 May 2021. This includes tax rebates on hot rolled coil, cold rolled sheet, color-coated sheets, high-alloyed rebar, seamless pipes, stainless steel sheets and plates will be reduced to z%, from previously 13%. 

Most products that the China’s Ministry of Finance announced cancellation of export tax rebates are high value-added products. This could help the country to ensure domestic supplies while curtailing production for fewer carbon emissions. 

Will this reduce China’s steel export, especially alloyed steel into ASEAN-6 countries after May 2021? 

Source : SEAISI