Steel Imports Continue To Flood Into China

According to the latest Customs statistics, the export of China's finished steel products dropped to 1.41 million tonnes in April, down by 15.6% from March or 70.5% below that of last year. This is the fourth consecutive month that China's steel exports have stayed below 2 million tonnes the lowest since November 2005.

Meanwhile, China imported 1.62 million tonnes of finished steel products in April, up by 0.35 million tonnes over the previous month. And the import volume of billet stood at 0.67 million tonnes, up by 0.23 million tonnes from March. The net imports of billet in April accumulated at 0.88 million tonnes, equaling to net import of 0.89 million tonnes in terms of crude steel, up 0.85 million tonnes. The widening gap between import and export has triggered much concern.

The world economy was hard-hit amidst the global financial crisis. To weather through the turmoil, nations across the world have put forward various packages to tackle the difficulties, but until now, the world economy shows no evident sign of recovery.

Against this background, trade protectionism is emerging aggressively across the world. And most of the suits are against China, largely damaging the Chinese steel export environment. China, unlike other countries, has launched no anti-dumping investigations or adjusted no import policy for steel imports, resulting in international steel flooding into China.

The external demand of China's steel has plunged since last September with the single month export dropping from 7.68 million tonnes to below 2 million tonnes. However, the steel products import increased at the same time, especially this year, the import volume increased from January 0.87 million tonnes to April 1.62 million tonnes. The import volume of billet also increased from 0.13 million tonnes to 0.67 million tonnes.

Definitely, the increasing influx of imported steel would largely affect the Chinese steel industry and further deteriorate the already oversupplied market. The gradual recovery of Chinese economy surely would support the world economy somehow, but there are still uncertainties amid the Chinese economy.

Source: Steel Guru