SteelOrbis Shanghai
According to the latest figures released by the Chinese customs authorities,
China's
semis and finished steel exports have continued their rapid growth. The new tariff policy did not curb
semis exports in November; instead, exports broke their monthly record for the last two years, up 20,000 mt compared with March 2005. At that time, the Chinese government had announced the cancellation of the export rebate for
semis from April 1, thus spurring on the sharp increase in exports for March of that year.
In November,
semis exports totaled 1.48 million mt, up 279 percent year on year and 59.1 percent month on month; imports totaled 20,000 mt, down 81 percent year on year and neutral month on month. The result is net exports of 1.46 million mt for November, up 550,000 mt compared with the previous month.
In the Jan-Nov period, the cumulative exports of semi finished steel totaled 8.54 million mt, up 30.6 percent year on year. Meanwhile, cumulative imports totaled 350,000 mt, down 71.8 percent, resulting in net exports of 8.19 million mt.
Finished steel exports also reached their monthly peak for this year in November, totaling 4.63 million mt, up 216 percent year on year and 8.9 percent month on month. Meanwhile, imports totaled 1.48 million mt, down 30 percent year on year and up 6.5 percent month on month, resulting in net exports of 3.15 million mt, up 290,000 mt compared with the previous month.
In Jan-Nov, cumulative exports of finished steel totaled 37.46 million mt, up 100 percent year on year; imports totaled 17.01 million mt, down 29 percent - giving net exports of 20.63 million mt.
China's
iron ore imports dropped down sharply in October, but rebounded in November, reaching 28.56 million mt, up 4.7 percent year on year and up 6.59 million mt month on month. Cumulative imports increased 19.8 percent year on year to 297.68 million mt in the Jan-Nov period.
With the remarkable rise in
semis exports in November, it seems that the 10-percent additional tariff imposed on
semis exports did not have the desired effect to say the least. The sharp rise instead of the sought-after drop in November indicates that the international market - especially the Southeast Asian market - is highly reliant on
China's semi finished steel. Unless the
CIS semis supply begins to flow into this region again, it will be impossible for the 10 percent tariff to restrict foreign demand for
China's semi finished steel.
In addition, the 3 percent decrease in the rebate rate as of December 14 has also weakened the competitiveness of
China's finished steel in
Southeast Asia, leaving a profit range for the local rolling mills and retaining the high demand level for Chinese
semis.
With the decrease in
iron ore imports in October, the rise in imports in November was still at a relatively low level, representing relief for
China's demand for international
iron ore. This may make the international
iron ore price negotiations even more complicated and so we may be in for a longer bargaining process.