China's steel exports reach highest in November

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.