China’s Q3 steel imports up, but drop expected for Q4

China’s Q3 steel imports up, but drop expected for Q4

Imported finished steel products ordered during the bullish early months of the year began arriving in China during the third quarter, further depressing an already weak market. China imported 2.494 million metric tons of finished steel products in September, up 337’000 metric tons month on month. Broken down by specific category, China imported 87’767 metric tons of rebar and wire rod; 43’291 metric tons of sections, channels, and beams; 2.225 million metric tons of flat products; 86’767 metric tons of tube and pipe; 17’413 metric tons of rail steel; and 34’583 metric tons of other products. The total import volume during the first nine months of this year was 20 million metric tons, down a little over 16 percent year on year. Going in the other direction, China exported 1.36 million metric tons of finished steel products in September. Broken down by specific category, China exported 374’113 metric tons of rebar and wire rod; 83’273 metric tons of sections, channels and beams; 509’925 metric tons of flat products; 270’431 metric tons of tubes and pipes; 1’862 metric tons of rail steel; and 120’149 metric tons of other products. The total export volume for the first nine months was 15.8 million metric mts, up 83 percent year on year. China’s net import volume in September was 1.134 million metric tons, up more than 38 percent month on month. Total net import volume of finished steel products through the first nine months was 4.2 million metric tons. China imported 114’000 metric tons of semi-finished products in September, up 36’000 metric tons month on month. China’s import volume of common carbon billet was 13’000 metric tons, down 2’456 metric tons month on month, while common carbon slab imports totaled 58’000 metric tons, up 30’000 metric tons month on month. The nine-month cumulative import volume of semi-finished products was 1.08 million metric tons. Going the other way, China exported 138’000 metric tons of semi-finished products in September, down 239’000 metric tons month on month. China exported 23’000 metric tons of common carbon billet, down 46’000 metric tons month on month, and 102’000 metric tons of common carbon slab, down 81’000 metric tons. The export volume for the first nine months totaled 5.98 million metric tons. The September net export volume of billet was 24’000 metric tons, while August’s was 299’000 metric tons. For the first nine months of 2005, net export volume was 4.9 million metric tons. China’s market prices of finished products were relatively high in the fist half of this year, especially in the first quarter. This encouraged traders to place orders with foreign suppliers. The bulk of these orders began arriving in July and the following months, pushing China into the category of net importer of finished steel for the third quarter. The rapid increase in imports placed great pressure on the market and was one of the major factors contributing to the price declines seen during the third quarter. As the prices of imported finished steel products were much higher than those of domestically made products, traders suffered great losses. In some cases, the cost of some of the products that arrived in July was RMB 1’000/mt ($124) higher than domestic products. Therefore, some traders, hoping that prices would increase, stopped selling imported products. This in turn led to capital problems. Orders for imported finished products in the third quarter decreased sharply. Therefore, a noticeable drop off in import volume is predicted for the fourth quarter. SteelOrbis Shanghai