Steel exports from China in January again exceeded 10 million tons

Steel exports from the country rose to a record high, with iron ore imports falling nearly 10 percent month-on-month and year-on-year, according to data released by China's customs office.

Effective January 1, 2015, due to the new boron-added steel export regulations, many analysts predicted a drop of up to 30 percent in Chinese export volumes within the first few months. But the maximum of 10.29 million tons in January speaks of a completely different story - Chinese steel mills have stepped up their exports even more, and this is the fifth consecutive month.

The Chinese economy and metallurgy have undergone radical changes in the past year, including a reduction in steel mills. The economy changed the tact from buying driven by a high growth model to modulating investments associated with a balanced model. Chinese growth fell to its lowest level in the last 5 years at 7.4 percent. In China, in 2014, domestic steel consumption fell by 3.4 percent year-on-year to 738.3 million tons. It is estimated that even at 75 percent capacity utilization in the steel industry, a surplus is created due to lack of demand in the domestic market.

The real estate and construction market in China has declined. While Chinese steel mills remain focused on maximizing yield, exports will continue to undermine the rest of the global steel market. Low export prices have helped Chinese steel mills capture the bulk of steel supplies around the world.