China’s exports of steel products during the first seven months of the year have surged to a record as domestic consumption falls amid increasing demand from the U.S. and Europe.
The world’s biggest producer exported a record 49.1 million metric tons of steel products from January through July, an increase of 37 percent from the same period last year, according to Bloomberg calculations based on data released by China’s General Administration of Customs today. Exports in July were 8.06 million tons, a 14 percent increase from the previous month and near the record in May.
China’s domestic steel demand in July fell 2.9 percent from the same month last year and net exports as a share of domestic production was 9.5 percent, the highest since 2008, Ivan Szpakowski, analyst at Citigroup, wrote in a note today. Finished steel demand will grow 2.3 percent in the U.S. and 1.4 percent in the European Union this year, the bank said in a July 13 report.
“This year has been a great year for steel demand in the developed world,” Graeme Train, a Shanghai-based analyst at Macquarie Group Ltd., said by telephone. “We’ve seen big increases year-on-year in most regions so conditions have just aligned to allow the Chinese to export a lot of material. It has the capacity, and with raw material prices coming off China has been the biggest beneficiary.”
Iron ore, the chief raw material along with coking coal for making steel, for immediate delivery into China’s Tianjin Port was $96 a dry ton yesterday, according to the Steel Index Ltd. Prices hit $89 on June 16, the lowest level since September 2012.
Source – bloomberg