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Chinese exports of steel products increased by 9.5 million tonnes during the first six months of this year, compared with the same period in 2013. MEPS estimates that offshore supply represents approximately 60 percent of the escalation of mill output in the period.
Foreign sales of finished rolled steel mill products climbed to 31.85 million tonnes in the first half of this year – up from 22.3 million tonnes in 2013. This gain in export activity was not confined to the popular importing nations. Of China’s top thirty export destinations, twenty nine recorded increased tonnages in 2014. The exception was Singapore with a minimal reduction of 0.4 percent.
Chinese steel is, currently, extremely price competitive in most global markets. Over the past twelve months, material from China’s steelmakers has become cost effective, to many customers in the West, despite long delivery lead times. However the most popular destinations remain those in the Asian continent.
In the first half of 2013, six countries imported in excess of one million tonnes of Chinese steel products – all of them in Asia. By comparison, in the January to June period, this year, steel exports of more than one million tonnes were shipped to twelve countries. These included two none Asian nations – United States and Brazil.
It is worth remembering that the economies of a number of South East Asian nations have built up, in recent years, a strong need for supplies of competitively priced steel products for their development. Many factories have been specifically set up in these countries to use local labour for assembly of products for western multi-national corporations.
So far in 2014, we have seen a number of significant changes to the pattern of Chinese exports over the past twelve months. Sales to Japanese customers went up from 273,000 tonnes in the first half of last year to 762,000 tonnes in the same period, this year. Exports to Brazil almost doubled in the same time span.
Steel supplies to the United States, in the first six months of 2014, increased by 77 percent, year-on- year. Most of the gain was in flat products. Other countries with significant advances, so far this year, are Pakistan, India, Belgium, Chile and UAE. In almost every case of increased import activity, the main driver was the competitive price.
