China’s net steel exports to be 3 million mt in 2006
SteelOrbis Shanghai
According to the latest figures from the Customs,
China's steel exports and imports went up in January 2006, but at a much lower rate than a year ago, yet indicating that
China will be a net steel exporter in 2006.
According to the statistics,
China exported 1.81 million metric tons of finished steel in January, up 320,000 metric tons or 21.5 percent year on year. The quantity was equal to that of December. Meanwhile the imports decreased 360,000 metric tons or 18.6 percent year on year to 1.57 million metric tons. On the other hand, January imports were 210,000 metric tons or 11.8 percent lower than December 2005.
China was a net exporter in January 2006 with a total net volume of 240,000 metric tons, up 570,000 metric tons year on year and 230,000 metric tons month on month.
China's import and export volume of
semis dropped slightly. January exports totaled 290,000 metric tons, declining 270,000 metric tons year on year or 48 percent, and 240,000 metric tons or 45 percent down month on month. The imports dropped to 20,000 metric tons, down 80,000 metric tons or 80 percent from a year ago, and down 50,000 metric tons or 71 percent from the previous month.
China was a net exporter of
semis with 270,000 metric tons export surplus.
China was a net exporter of crude steel with 530,000 metric tons in January. However, the value of imports surpassed that of exports by $402.38 million.
China made a remarkable progress in finished steel exports in January, and she is likely to become a net exporter in 2006. However, the growth rate of exports saw a sharp decline and the import growth rate has not changed obviously. Therefore the changes in full-year imports and exports will not be in large amounts.
The market condition in January was bearish, therefore many domestic steelmakers made losses. On the other hand, the international market prices were higher compared to the domestic prices. Under these circumstances, January 2006 export volume equaled to that in December 2005, showing that there was not much room for export increase. At present, there still exists some gap between the quality of Chinese products and those in international markets.
China's major export destination is
Southeast Asia, and she rarely exports products to European and American markets, where she may meet with anti-dumping difficulties. At the same time, exporting products is becoming more difficult due to the increase in Chinese steel prices in the domestic markets. Therefore, the growth of Chinese steel exports will inevitably see a sharp decline in the short term. The cumulative export is expected to reach 23 - 24 million metric tons in 2006, with approximately 15 percent growth.
January import volume of steel products was at 1.57 million metric tons, showing that
China has a demand for overseas good quality steel products. Generally speaking, it takes three months to import steel products. Those products arrived in January 2006 were booked in October 2005, when
China's steel prices saw a dramatic price drop. At that time, there were not many traders who placed orders. Most orders were from end users. In the short term, the imports cannot be replaced by domestic products. Therefore, a sharp decrease in import volume is not quite possible. As prices fluctuated a lot in the previous year, traders imported by large amounts, leading to the fact where import volume could not reflect the domestic supply and demand relation. In March, April, June and September 2005, the import volume was around 2.5 million metric tons monthly. Due to that, the imports will decrease at around 20 percent in 2006, greater than the previous year. So, the full year import volume will be 20 - 21 million metric tons.
According to the calculation above,
China's net export volume of steel products in 2006 will be around 3 million metric tons.