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Home > MEPS Steel News - 08.02.2013

CHINA’S GROWTH IN NET STEEL TRADE WAS WORTH $US5 BILLION IN 2012

According to MEPS, total Chinese exports of finished rolled steel products, in 2012, are expected to be 6.6 million tonnes above the outturn in the previous year at 39.25 million tonnes. Imports are predicted to have declined by 1.8 million tonnes to 12.5 million tonnes. The positive balance of trade would, therefore rise from 18.3 in 2011 to 27.5 million tonnes last year. This represents an increase of 46 percent (worth approximately $US5 billion).

This will be a remarkable performance by the Chinese steel sector. Finished rolled steel consumption in the rest of the world was virtually unchanged. Consequently, the Chinese mills were able to increase their share of global apparent steel demand, in difficult market conditions. Much of this is due to their ability to produce competitively priced products which are fit for purpose for a large proportion of applications, worldwide.

The majority of the gain in exports of finished rolled steel products has occurred in the supply of long products – up by 6 million tonnes (20 percent), year on year. The most significant improvement will be seen in the supply of wire rod and merchant bars. A meaningful increase is expected for hot rolled sections. Hot rolled coil, however, is the only flat product expected to show a noteworthy advance.

Almost 90 percent of Chinese steel imports are specialist flat products. In 2012, these will be down by approximately 1.5 million tonnes, year on year. Domestic producers will have made up the difference.

In recent years, buyers in Asia have become the most prolific purchasers of Chinese steel. Based on 11 months of data, we expect that, in 2012, Asian countries will fill all the top eight positions in the list of the most important destinations for Chinese steel exports. In the previous year, those nations took just five of the top eight places. This reflects the changing nature of the global economy.

China’s steelmakers also are major exporters of seamless and welded steel tube. These are manufactured, often by local steel mills, from their output of finished rolled steel products. In 2012, total exports of tubes are likely to reach 8.9 million tonnes – up from 8.3 million tonnes in the prior year. This tonnage is extra to the exports of finished rolled steel products specified earlier.

It is clear that the Chinese steel industry will continue to be a dominant force in export markets in the years to come. Overcapacity is, currently, an issue but more is being installed. It is reported that, total capacity could have reached 1 billion tonnes in 2012.

Source: MEPS China Steel Review


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