SteelGuru: Chinese Exports to Surge as Domestic Consumption Shrinks
05/21/2015 - Anticipated slowdown in domestic steel consumption is China is likely to throw up surplus volume for export.
It is expected that the Chinese steel consumption will plummet by 6% in 2015 which translates to 45 million tonnes surplus. It will keep the Chinese mills agog and on the prowl to liquidate it in the international market. The already sunken price levels in across the globe portends to decline further obfuscating any early chance of revival.
Regarding declining consumption trends, The Chinese Iron and Steel Association (CISA) had said in April end that “China’s steel consumption is set to decline this year as demand from property, autos, ships and appliances weakens. Property development is falling for a second year, automobile production growth has slowed, shipbuilding activity dropped and home appliance output except for washing machines slid in the first quarter. There will be difficulty growing steel demand and it’s apparent we’ve reached a peak in steel consumption.”
The trend in the 1st 4 months (Jan-April) shows that China is exporting at an average of nearly 9 million tonne per month. It has shown y-o-y growth of 32.6% touching 34.31 million tonnes.
Regarding surge in steel exports, CISA had said recently that “China's steel exports will remain competitive and are unlikely to fall much this year, as low prices and firm demand offset the scrapping of an export tax rebate on certain products. There is still demand in international markets and there is a price gap between steel at home and abroad. Chinese steel exports are still competitive and will not drop by a large amount.
Global steel market will see surge in export from China leading to lowering of price and more trade barriers in place to counter the deluge. Since Chinese mills will be inclined to push the volumes in the nearby market in countries like Korea, Japan and India the situation for domestic mills in these countries will be more critical. Indian mill already reeling under the double attack of Chinese and CIS mills are doomed for despair lest the domestic demand picks up in big way to swallow volumes.
Source: SteelGuru
Regarding declining consumption trends, The Chinese Iron and Steel Association (CISA) had said in April end that “China’s steel consumption is set to decline this year as demand from property, autos, ships and appliances weakens. Property development is falling for a second year, automobile production growth has slowed, shipbuilding activity dropped and home appliance output except for washing machines slid in the first quarter. There will be difficulty growing steel demand and it’s apparent we’ve reached a peak in steel consumption.”
The trend in the 1st 4 months (Jan-April) shows that China is exporting at an average of nearly 9 million tonne per month. It has shown y-o-y growth of 32.6% touching 34.31 million tonnes.
Regarding surge in steel exports, CISA had said recently that “China's steel exports will remain competitive and are unlikely to fall much this year, as low prices and firm demand offset the scrapping of an export tax rebate on certain products. There is still demand in international markets and there is a price gap between steel at home and abroad. Chinese steel exports are still competitive and will not drop by a large amount.
Global steel market will see surge in export from China leading to lowering of price and more trade barriers in place to counter the deluge. Since Chinese mills will be inclined to push the volumes in the nearby market in countries like Korea, Japan and India the situation for domestic mills in these countries will be more critical. Indian mill already reeling under the double attack of Chinese and CIS mills are doomed for despair lest the domestic demand picks up in big way to swallow volumes.
Source: SteelGuru
