The price gap widened in the first three quarters of the inhibition of steel exports

In the first three quarters of this year, China's steel exports fell compared with the same period last year, while imports rose compared with the same period last year. Industry insiders expect China's steel exports to resume growth and imports to decline as the global economy recovers.

Export reduction

Statistics from the General Administration of Customs show that in the first nine months of this year, China exported 40.385m tons of steel, down 19.6% from the same period last year. The accumulative export amount was 232.78 billion yuan, 18.3 percent less than that of the same period last year.
China's steel exports rose and fell in the first three quarters of this year, including an eight-year low in June. In the third quarter, although China's steel exports have picked up, but the effect is not obvious. About reason, gold lianchuang steel, a senior analyst at Zhang Ying shadow think, ", cycle, starting from the second quarter, domestic steel prices rebound, and the international market is still plagued by the outbreak, industry's recovery was slow, which makes the domestic steel prices higher, with the international steel prices lower, weakening China's steel export price advantage. Under the impact of the downward pressure of the global economy and the coVID-19 epidemic, the demand in the international market has declined, and China's steel export orders have declined accordingly. In addition, continuous trade frictions have led to more challenges for China's steel exports."
Liu Zhixin, steel analyst at Zhuochuang Information, also said, "Compared with the international market, the domestic market demand is good and profits are high, which suppressed the export market of Chinese steel in the first three quarters. Domestic and foreign public health incident prevention and control effect is different, China's effective epidemic prevention and control, coupled with the policy pull, the terminal manufacturing industry quickly recovered, the relevant steel demand continues to increase; But the foreign manufacturing industry is greatly affected, steel demand is weak, low steel prices."
It is worth noting that although the total amount of steel exports fell in the first three quarters, the unit price of exports reached a high in nearly three years. There are two reasons: first, the rising price of China's steel exports, and second, China's steel exports tend to high value-added products.
At present, the global economy is gradually recovering. In September, the global manufacturing PMI was 52.9%, with a month-on-month growth of 0.4%. The INTERNATIONAL Monetary Fund also raised its estimate of global growth this year to minus 4.4 percent from minus 5.2 percent in June. Zhang Yingying believes that "although it is still a negative growth expectation, it also shows that the global economy is gradually recovering, which will effectively boost the growth of steel demand, and China's steel export will gradually resume growth in the future".
Since the beginning of this year, under the influence of multiple factors such as cost, policy, capital and demand, Chinese steel market price has been pushed to a higher position, but it is difficult to maintain the high price continuously. Liu Zhixin believes that from the perspective of domestic demand and output, the expectation of domestic steel supply exceeds demand is high, which will stimulate the market to relieve the supply pressure through exports, it is expected that China's steel exports will gradually increase in the future.

Import growth

In the first nine months of this year, China imported 15.073 million tons of steel, up 72.2 percent from the same period last year. The accumulative import value reached 85.87 billion yuan, up 20.9 percent over the same period last year. From the perspective of steel import distribution countries, the cumulative import volume of the top three countries from January to September is South Korea, Japan and India, accounting for 60% of the total import volume of the country.
"So far this year, China's steel imports have shown a trend of substantial growth. It has been growing since May and by September, China's steel imports were at a record high, in addition to a slight decline in August." Zhang said the main reason for the increase in steel imports was that steel prices in neighboring countries such as Southeast Asia and Japan and South Korea were better than those in China.
The increase in China's steel imports led to an increase in the amount of imports, but it should be noted that the unit price of steel imports fell all the way to the lowest price range since 2016. Zhang Believes that this is mainly due to the increase in the import of low value-added products, such as billets, rebar, hot coil, although the import volume has increased, but the import unit price has declined.
China is a large country in terms of steel production and demand. Currently, the quantity of imported steel is not enough to impact the domestic market. Currently, the imported steel is mainly concentrated in the southeast coastal cities. Zhang Yingying said, "With the gradual recovery of the international market, the international steel price will gradually recover, the domestic and foreign price difference is bound to return to the normal value, the international steel market into China will gradually reduce the space, it is expected that the future steel import probability will be reduced."