China became a net importer of steel for the second consecutive month in July, despite crude steel production rising 9% year on year during the month, according to customs data released Aug. 26.
China may remain a net steel importer in August, but could return to being a net steel exporter sometime in the fourth quarter, market sources said.
China imported 2.46 million mt of semi-finished carbon steel products in July, comprising mainly billet and slab, up 4% from June. Added to finished steel imports, it took China’s total steel imports in July to 5.06 million mt, surpassing July’s steel exports of 4.18 million mt, customs data showed.
The steel imports in July were mainly from orders placed in May, when the Chinese domestic steel demand rebounded strongly, as the infrastructure and property construction sectors were boosted by monetary and fiscal stimulus.
At that time, other markets were still under lockdowns or recovering from the impact of the coronavirus pandemic, making China a very attractive destination for steel, sources said.
Exports improving
However, since July, China’s steel import orders have slowed, while export orders have improved.
This is because overseas markets have gradually resumed operations, while the Chinese domestic demand has been dented by rains, floods and high temperatures, market sources said.
Orders placed since July will be shipped from September onwards.
Some market sources said they had barely seen any import orders for semi-finished steel recently, while export orders for flat steel products had improved since July, and wire rod export business had also fared better since August.
“Our clients in Southeast Asia have begun to purchase wire rod again since August, and orders received in August recovered to around 40% of the normal volume before the coronavirus outbreak hit the global economy,” one mill source in eastern China said.
Moreover, China has tightened its monetary stimulus and strengthened restrictions in the property sector since July, putting downward pressure on the Chinese domestic steel market in the second half of 2020.
Some sources said there will be more opportunities for China to export steel in H2 2020 than there was in the first-half.
Source:Platts
The opinions expressed herein are the author's and not necessarily those of The Xinde Marine News.
Please Contact Us at：
media@xindemarine.com
.gif)
