China's steel exports fell by 17.9% year-on-year to 5.22 million tons in June

In June of this year, China exported 522 million tons of steel, which is a decrease of 340,000 tons compared with May, and a decrease of 1.14 million tons compared with the same period of last year, a year-on-year decrease of 17.9%. Analysts said that the unexpected drop in steel exports in June may be due to the decrease in demand caused by the sudden financial crisis in Vietnam, but this data has greatly reduced the possibility of increasing steel export tariffs.

May decline in Vietnam's exports

Before the data on steel exports was announced in June, industry insiders and research institutes all agreed that exports in June will continue to accelerate growth, and will likely exceed 6 million tons. Therefore, the 5.22 million tons of export volume caused all parties to scream surprises. "My steel" analyst Zeng Shengsheng said in an interview with this reporter. "This data has a certain gap with our previous follow-up investigations and forecasts. I did not expect such a big fall."

It is understood that the current international steel market price increases are higher than the domestic market. Even with tariffs, freight, and other factors, foreign steel exports can still benefit, which is the main factor to promote steel exports growth. Since June, domestic steel prices have generally declined and entered the consolidation period. However, foreign steel prices have remained strong. The spread of steel products at home and abroad has not declined; however, ocean freight rates have also declined sharply. Analysts stated that, in principle, The stimulation of these factors should maintain a higher export volume of steel products.

"It is very likely that the impact of the financial crisis in Vietnam, the sharp decline in steel demand, and the traditional off-season from July to August, the enthusiasm of stocking purchases declined," said Hu Yanping, a joint metal network analyst, "The major steel mills have suspended their exports. Plating also has a certain influence. Plating accounts for about 10% of steel export volume." Statistics show that from January to May this year, China's steel exports to Vietnam were 473,800,000 tons, 389,000 tons, 417,700 tons, 515,200,000 respectively. With tons and 277,700 tons, the export volume to Vietnam in May has apparently dropped. “Vietnam may be an important factor. On the other hand, the international market has a relatively strong wait-and-see mood. Due to high prices, the transaction volume has shrunk to a certain extent.” Zeng Jisheng stated that the EU has frequently implemented anti-dumping measures against Chinese steel products. For the export of domestic small and medium-sized private steel companies will also have a certain impact. 

According to statistics, in March this year, the export of steel products hit a new low. From March to May, steel exports rebounded in a chain rate for three consecutive months. In May, the export volume was as high as 5.555 million tons, accounting for 12% of the total output of steel products. Industry speculation on increasing steel export tariffs. Analysts pointed out that if the export volume exceeds 6 million tons in June, the relevant departments are likely to raise tariffs again to curb export impulses.

It is still possible to increase tariffs during the year

“Export data in June has greatly reduced the possibility of raising tariffs,” Zeng Jisheng said. Currently, relevant government departments and steel associations are very sensitive to tariff adjustments, so they will be cautious in decision-making. “But the possibility of adjusting tariffs during the year It still exists.” Hu Yanping said that the target of tariff adjustment may be aimed at export growth, and at the same time enjoy export tax rebates.

Analysts pointed out that the drop in steel prices in June was only an accidental situation and did not form a downward trend in exports. At present, international demand is still strong, and the difference between steel prices at home and abroad is still relatively large. In the absence of substantive restrictions, steel exports in July and August still have the potential to increase. “From our follow-up survey data, the domestic steel mills and traders’ export enthusiasm is still high,” Zeng Shengsheng said.