China’s
semi-finished steel exports retreated 3.1% on the month to 278,000 mt in June,
falling for the first time in three months, the country’s customs data showed.
While the
June volume was still well above the 1,618 mt exported a year earlier, sluggish
overseas demand has led to a sharp drop in order bookings, leading to
potentially sharp declines in exports in coming months, market participants
told S&P Global Commodity Insights.
Counting in
finished steel, China’s total steel exports in June reached 7.835 million mt,
down 2.6% on the year, according to the customs data.
China’s
total steel exports fell 8.7% on the year to 34.145 million mt during
January-June.
However,
June total steel exports were still the second highest seen at least since May
2021.
China’s
steel exports rose year on year in May and June, with the surge mostly stemming
from strong order bookings in March after the Russia-Ukraine conflict disrupted
global steel markets.
But since
June, market dynamics have changed, pressuring Chinese steel exports.
Steel
exports are expected to continue on a downtrend through the end of 2022 as
efforts to curb inflation have led to a contraction in overseas steel demand,
sources said.
Import situation
China’s semi-finished steel imports rebounded 26% on the month to 454,000 mt in
June, but purchases were still 65.2% lower on the year, customs data showed.
Total
imports of semi-finished and finished steel in June dropped 51.3% on the year
at 1.245 million mt.
In the first
half of 2022, total steel imports were down 27.4% on the year at 9.524 million
mt.
“Poor
domestic demand has prompted Chinese steelmakers to extend their steel output
cuts since mid-July, and even if demand could pick up in August-September,
domestic steel production will recover quickly without creating too many
opportunities for steel imports,” a trader said.