China increased the export of steel products by 40.9% y/y in January-May

In January-May 2023, Chinese steel companies increased the export of steel products by 40.9% compared to the same period in 2022 – up to 36.37 million tons. This is evidenced by the data of the China Iron and Steel Association (CISA).

In May 2023, China’s steelmakers shipped 8.36 million tons of steel for export, which is 5.3% more than in April. Compared to May 2022, the indicator increased by 7.7%. The average export price in May was $922.2/t, which is 175.3/t less month-on-month and 33.1% y/y.

In January-May 2023, steel imports into China amounted to 3.13 million tons, which is 37.1% less than in the same period of 2022. In May, Chinese consumers increased imports of steel products by 7.9% compared to April 2023, but by 21.7% less than in May 2022.

The average steel import price in May was $1,737/t, down 1.8% from the previous month, but up 4.5% from May 2022.

High rates of steel exports from China are caused by low prices for steel products compared to other exporting countries, as well as low domestic demand, which forces domestic producers to send products abroad.

The main volumes of steel are exported to regions where there are no trade barriers, including Southeast Asia, the Middle East, South Asia, Central America, etc.

Domestic demand for steel products is still very low. The construction industry, which is the largest consumer of steel, has shown signs of recovery, but investment and construction are still down from a year earlier.

Exports are expected to begin to decline from early summer as China cuts output due to government pressure to cut steel output from 2022 and amid slowing overseas demand as countries grapple with inflation and decreasing purchasing power.

As GMK Center reported earlier, China in January-April 2023 increased steel production by 4.1% compared to the same period in 2022 – up to 354.39 million tons. In April, Chinese steelmakers produced 92.64 million tons of steel, which is 1.5% more than in April 2022.

China’s steel production is expected to face more pressure in the second half of the year as the country’s government announced plans to cut steel output from 2022.