SteelOrbis Shanghai
According to the data released by the Chinese customs authorities, China's finished steel export volume for July recorded a historic high at 7.21 million mt, up 50,000 mt from the previous record of 7.16 million mt registered in April. The figure in July is significantly 1.99 million mt or 38.1 percent higher than the previous month and up 1.27 million mt or 21.4 percent year on year. During the January-July period, China exported a total of 34.15 million mt of finished steel, with a drop of 14 percent year on year, while the total value in question reached US$33.1 billion, up 24 percent year on year.
In July, China imported 1.44 million mt of finished steel, up 180,000 mt or 14.3 percent over the previous month, and up 50,000 mt or 3.6 percent year on year. During the first seven months of 2008, China's finished steel import volume totaled 9.72 million mt, with a decrease of 370,000 mt or 3.6 percent year on year.
As a result, China's net exports of finished steel in July amounted to 5.77 million mt, up 1.81 million mt or 45.7 percent over the previous month, and up 1.22 million mt or 26.8 percent year on year. During the January-July period, net exports of finished steel totaled 24.43 million mt, down 5.18 million mt or 17.5 percent year on year.
China's semis exports in July stood at 230,000 mt, down 670,000 mt or 74.4 percent year on year while up 210,000 mt or 1050 percent over the previous month. Total semis exports in the January-July period reached 360,000 mt, down 4.91 million mt or 93.2 percent year on year. Semis imports in July stood at 10,000 mt, down 10,000 mt over the previous month and with no change compared with the same month of last year. Total imports of the subject product in the January-July period reached 110,000 mt, down 40,000 mt or 26.7 percent year on year.
China's crude steel export volume in July reached 7.82 million mt, up 670,000 mt or 9.4 percent year on year; meanwhile, net exports of crude steel in July came to 6.29 million mt, up 610,000 mt or 10.7 percent year on year. Total exports in the January-July period reached 36.31 million mt, down 10.75 million mt or 22.8 percent year on year, while net exports in this period came to 25.97 million mt, down 10.32 million mt or 28.4 percent year on year.
In addition, China's coke exports in July reached 830,000 mt, down 150,000 mt or 15.3 percent year on year and significantly down 670,000 mt or 44.7 percent over the previous month. Total exports of the product in question in the January-July period reached 8.27 million mt, down 750,000 mt or 8.3 percent year on year. The export value for this period totaled US$3.58 billion, with an increase of 132.5 percent year on year.
Iron ore imports in July stood at 39.63 million mt, up 1.84 million mt or 4.9 percent over the previous month and up 17.9 percent year on year. Total exports in the January-July period reached 269.61 million mt, up 21.8 percent year on year. The total export value for this period was US$36.6 billion with a year-on-year increase of 115.4 percent. The average price was $135.75/mt.
Although insiders had high expectations for China's July steel export data, the data released by customs still surprised the market. Against the background of high export tariffs and weakening demand from the international markets, it is genuinely surprising that China's steel exports volume still managed to record a historic high.
The increase of exports in July can be attributed to the fact that some tonnages which should have been exported in June were postponed for export in July due to the more serious customs inspections being performed on steel exports. While some exporters add boron to their products to avoid export tariffs by legal means, others are illegally exporting standard steel while calling it alloyed steel. In this context, China's customs authorities have been putting stronger emphasis on the inspection of steel exports and, as a result, exports of steel have been delayed.
In July, China's imports of iron ore bounced back close to 40 million mt, the second highest monthly figure in 2008. The significant bounce-up in imports of iron ore will put huge pressure on China's iron ore market.
With the international markets declining significantly since July, foreign buyers are showing less interest in purchasing Chinese steel and are instead adopting a wait-and-see attitude. So far in August, the volume of contracted exports has gone down greatly, leaving less optimism for steel exports in the coming period.