Steel exports from China hit a new record

Export deliveries of steel from China in November 2014 increased by 14 percent over the month and amounted to 9.72 million tons. Total exports in the first 11 months of 2014 reached 83.6 million tons, up 47 percent over the same period last year. Chinese steel mills have stepped up their steel exports, especially in the last 3 months (November - 9.72 million tons, October - 8.55 million tons, September - 8.52 million tons).

Even with a 75 percent capacity utilization of the steel industry, a surplus of volume remains due to the lack of demand in the domestic market. A weak real estate market and sluggish construction activity in the civil and industrial sectors in China negatively affect the demand for steel products.

China's factories have boosted exports in an effort to eliminate surpluses and to more fully implement a rather dubious export stimulus plan. And steel exports have nearly doubled in the past 3 months, with Chinese steel mills slashing their export prices sharply. Low export prices have helped Chinese factories capture the bulk of imports around the world, outperforming major steel producers from other countries.

Economic growth in China fell to 7.3 percent, the lowest in 5 years and does not bode well for the immediate future. In 2014, the Chinese economy and steel industry underwent radical changes from last year. China changed its high growth strategy to a balanced investment model, and it was also liquidating outdated metallurgical facilities that did not meet environmental standards.