Steel Trade Data: Chinese exports decline 15% in October on soaring domestic demand

BEIJING (Scrap Monster): The steel exports from China has recorded sharp decline during the month of October this year. This is amidst tight import restrictions and duties imposed by several countries on cheap steel products imported from China. The sharp drop in exports is also on account of the rise in domestic demand, noted press statement released by the National Development and Reform Commission (NDRC). Meantime, centrally administered state steel enterprises are reportedly on track to achieve the annual capacity reduction goal set for 2016. The country may meet overcapacity-cut target for the year in advance.

As per trade data, the country’s steel exports totaled 7.7 million tons during the month of October this year. This is nearly 15% lower when compared with the exports of 9.06 million tons recorded during the same month a year before. This is the third consecutive month of decline for Chinese steel products. The steel exports by the country had recorded 22% decline in exports during September. The steel exports by the country exports had declined by nearly 7.5% during August this year. Meantime, the cumulative steel exports during the initial ten-month period of the year were still up marginally by 0.7% over the previous year at 92.74 million tons.

The continuous drop in steel exports is mainly on account of various importing countries slapping hefty duties on imports of Chinese steel. According to them, dumping of subsidized steel products from China tend to cause severe damage to domestic steel sector in respective countries.

Based on complaints filed by leading US domestic steel producers including Nucor Corp. and U.S. Steel Corp., the US government had decided to impose tariffs of 266% on imports from China and other countries- Brazil, India, South Korea, Russia, Japan and the U.K. The regulators had earlier determined that the steel products such as hot-rolled, cold-rolled and corrosion-resistant steel imported from China and other major trading partners are excessively subsidized.

Last week, Indian government had imposed anti-dumping duty on imports of steel wire rods from China, in a bid to protect domestic steel wire rod manufacturers. The notification issued by the Department of Revenue had stated that the duties are being imposed for a period of six months on import of wire rod of alloy or non-alloy steel from China. The action followed observation by the Directorate General of Anti-Dumping and Allied Duties (DGAD) that the domestic industry had suffered material injury due to export of such goods by China at ‘below the normal value’.

Also, more countries from the EU region have demanded imposition of punitive duty on imports of certain steel products from China, as one of the few ways to protect jobs in European steel sector. According to the European Commission, almost one-fifth of the region’s steel sector jobs have disappeared since 2008.

Meantime, the State-owned Assets Supervision and Administration Commission (SASAC) noted that the centrally administered state-owned enterprises (SOEs) are likely to achieve the annual capacity reduction goal for the entire year ahead of schedule. The official target of 7.19 million tonnes, set by the government for 2016, is most likely to be achieved by mid-November.As per government plans, the five central SOEs are supposed to cut their crude steel capacity by a total of 21.37 million tonnes during the three-year period commencing in 2016. The country is ahead in its efforts to phase out excess steel capacity, stated NDRC official.