Posted on 16 Oct 2024
Chinese steel exports in September hit their highest level since 2016, in a surge that risks stoking trade tensions as the top producer offloads its surplus to the rest of the world.
The latest monthly figure of 10.2 million tons brings year-to-date volumes to nearly 81 million tons, up 21% from a year earlier. A subdued domestic market has spurred Chinese traders to send as much material as possible overseas. Steel is one of the commodities most affected by the protracted slump in China’s property market.
China’s steel exports this year have become a target of trade complaints from Southeast Asia to Latin America, even as shipments of higher-tech goods like electric vehicles and batteries also stir controversy.
At a trade briefing on Monday, customs officials dismissed concerns about the rise in steel shipments, pointing out that most of China’s production is still used domestically. The dollar value of steel exports fell 5% in the first nine months of the year, although that’s mostly due to tumbling prices.
‘Vast Market’
Chinese steel is in high demand globally because companies are offering innovative new products for precision machinery and high-end manufacturing, said Lv Daliang, director of the Statistical Analysis Department at the customs administration.
“Under the trend of accelerating the development of new quality productivity in China, the steel industry is also constantly innovating and upgrading,” Lv said. “There will be a vast market for innovative steel products like this both domestically and internationally.”
China’s domestic steel demand will fall 3% this year to about 869 million tons, even as the rest of the world posts growth of 1.2% to 882 million tons, the World Steel Association said in a report issued on Monday. India, Southeast Asia and the Middle East are all seeing solid expansion of steel demand.
China is now on track to ship well over 100 million tons of steel this year. The bulk goes to Asian nations, but markets further afield have seen big inflows of Chinese products. Vietnam, by far the biggest single buyer, has launched a probe into Chinese steel.
The export surge “is due to really weak domestic demand and prices during September,” said Wei Ying, an analyst at China Industrial Futures Ltd. “Traders have been maximizing exports due to the widening overseas premium over domestic.”
In other highlights from the trade data, coal imports hit a record high of 47.6 million tons in September as buyers continued to take no chances in guaranteeing the country will have enough fuel over the colder winter months. Shipments have surged 12% over the year to date, even as industrial demand has weakened and China has stepped up supply from renewable sources.
Source:Bloomberg
