China's steel exports in the second half of the year may continue to decline because of low demand

The sources said that steel exports are expected to continue on a downward trend until the end of 2022 as efforts to contain inflation have caused steel demand abroad to fall.
China's semi-finished steel exports fell 3.1% month on month to 278,000 tons in June, according to data from the General Administration of Customs of China.

According to S&P Global Commodity Insights, several sources said that while the export volume in June was still much higher than the same period last year, low demand in consumer markets caused a sharp drop in orders, leading to exports are likely to decline sharply in the coming months.

Including finished steel, China's total steel exports in June reached 7.8 million tons, down 2.6% year-on-year, according to customs data. Accumulated in the first half of this year, total steel exports decreased by 9% to 34 million tons.

China's steel exports in May and June increased year-on-year mainly due to strong orders in March after the Russia-Ukraine conflict disrupted the global steel market.

But since June, market dynamics have changed, putting pressure on steel exports. The sources said that steel exports are expected to continue on a downward trend until the end of 2022 as efforts to contain inflation have caused steel demand abroad to fall.

Semi-finished steel imports in June increased 26% from May to 454,000 tons, but purchases were still 65% lower than the same period last year, according to customs data.

Total imports of semi-finished and finished steel in June decreased by 51.3% year-on-year at 1.2 million tons.

In the first half of 2022, total steel imports fell 27.4 percent year-on-year at 9.5 million tons.

“Poor domestic demand has caused Chinese steelmakers to continue to reduce output, and even if demand may increase in August-September, domestic steel production will quickly recover without generating too many opportunities for steel imports,” a trader said.

According to Reuters, Chinese media reported last Friday (July 22), the country is working to strengthen the economic recovery. In particular, the third quarter is considered an important period, placing priority on stabilizing jobs and prices.

"The market is looking forward to an economic recovery in the third quarter," said analysts at Zhongzhou Futures.

Vietnambiz