Steel exports from China fell to 2021 low in September

Steel exports from China slowed in September to their lowest level since December 2020 due to the country's export control policies, as well as weaker demand in Southeast Asia due to the Covid-19 lockdown.

Most of the steel export shipments in September were spot orders received in July and early August due to China's tightening of export restriction policies. The Chinese government instructed steelmakers to cut exports in July. To further restrict the supply of steel by manufacturers to foreign countries, China canceled value-added tax exemptions from August 1 for the export of cold-rolled coils, hot-dip galvanized steel coils and sheets, galvanized steel coils and sheets, silicon steel and rails. steel.

Steel demand in Southeast Asia has also declined due to the spread of the Delta variant of Covid-19. Vietnam, the largest buyer of Chinese steel in the region, has been on lockdown since 23 August. Manila in the Philippines was blocked for most of July and August.

Steel exports from China are likely to contract further in October due to the tightening of China's policy to restrict domestic steel production. Plants belonging to the China Iron and Steel Association reduced production to 1.7688 MT /d for September 21-30, the lowest level since March 2018, due to increased restrictions due to power outages, maintenance and other restrictions.

The production cuts also boosted domestic steel prices in China and further weakened producers' interest in exports. Rebar prices from the Argus Shanghai warehouse rose 1,090 yuan /t, or 22.4%, to 5,950 yen /t from July 1 to October 11. Hot rolled coil prices from the Argus Shanghai warehouse rose RMB 350 per tonne, or 6.4 percent, to RMB 5,850 per tonne in the same period.

Imports of steel products to China increased by 18.2% compared to August to 1.256 million tons in September. In January-September, China imported 10.72 million tons of steel, which is 28.9% less than a year earlier.