China urges traders to limit exports amid rising global prices

The China Steel Association urged trading companies not to increase exports to take advantage of rising global prices, but instead prioritize meeting domestic demand.

Steel prices in Europe soared after Russia's invasion of Ukraine disrupted logistics, triggered sanctions and raised energy prices, forcing some producers to cut production.

Reduced supply and lower prices in China have created strong overseas demand, Qu Xiuli, vice chairman of the China Iron and Steel Industry Association (CISA), said at a press conference.

CISA is supported by the government but has no regulatory authority in the sector.

She urged industry participants to follow government trade policies and not increase exports despite attractive margins.

“We continue to hope that the industry will not increase exports and follow the government's policy of prioritizing domestic demand,” Qu said, adding that China raised export tariffs twice on some steel products last year.

According to the customs service, the volume of exports of steel products by the world's largest metal producer in January-March decreased by 25.5% to 131.8 million tons compared to the same period last year.

But shipments booked in March have risen significantly on attractive profit margins, traders told Reuters.

A steel trader from a state-backed trading firm, who declined to be named because he is not authorized to speak to the media, said orders for hot-rolled coils from Turkey have risen and exports to other European countries have also risen.

However, leading steelmakers such as Baoshan Iron & Steel Co Ltd and Hunan Valin have recently pledged to keep their exports in line with government requirements.
According to CISA, apparent steel consumption fell 9.5% year-on-year in the first quarter due to sluggish consumption in the construction and manufacturing sectors.
With an economic growth target of around 5.5% this year, the decline in consumption in the first half of the year "will only be delayed, not eliminated," said Shi Hongwei, deputy general secretary of CISA.