SteelOrbis Shanghai
According to the data issued by Chinese customs, in August 2007 China exported 5.38 million metric tons of steel products, up 1.52 million tons or 39.4 percent compared to August 2006, and down 560,000 metric tons or 9.4 percent over last month. During the same period, China imported 1.46 million metric tons of steel products, down 170,000 metric tons or 10.4 percent compared to August 2006, and up 70,000 metric tons or five percent month on month.
In August 2007, exports of semis totaled 340,000 metric tons, down a strong 790,000 metric tons or 69.9 percent compared to August 2006, and also down a considerable 560,000 metric tons or 62.2 compared to last month. Meanwhile, semis imports for August 2007 totaled 10,000 metric tons, down 36,000 metric tons compared to August 2006, but remaining the same as last month's figure.
From January to August 2007, total exports of steel products from China came to 45.08 million metric tons, up 20.56 metric tons or 83.8 percent compared to the same period of the previous year. Meanwhile, steel product imports for the period in question totaled 11.55 million metric tons, down 1.02 million metric tons or 8.1 percent year on year.
China's total semis exports for the January-August 2007 period amounted to 5.61 million metric tons, up 550,000 metric tons or 10.9 percent year on year; on the other hand, total semis imports for this period came to 170,000 metric tons, down 120,000 metric tons or 41.4 percent compared to the same period of 2006.
In August, China's net exports of steel products totaled 3.92 million metric tons, while net semis exports stood at 330,000 metric tons. If calculated as crude steel, net crude steel exports in August totaled 4.46 million metric tons, down a strong 1.22 million metric tons or 21.5 percent compared to the previous month. From January to August, net exports of steel products totaled 33.53 million metric tons, while net semis exports came to 5.44 million metric tons. If calculated as crude steel, for the period in question net exports of crude steel totaled 40.73 million metric tons.
In August, coke exports totaled 1.24 million mt, down 400,000 mt or 24.4 percent year on year; meanwhile, the cumulative January-August coke exports totaled 10.26 million mt, up 1.1 million mt or 12 percent compared with the same period last year.
Iron ore imports in August totaled 29.29 million mt, down 8.92 million mt or 23.3 percent year on year and down 4.32 million mt or 12.9 percent month on month. January-August imports totaled 251 million mt, up 32 million mt or 14.6 percent year on year.
Due to the continuous increase in Chinese finished steel prices since the beginning of July, traders faced more and more difficulties in achieving exports. Chinese mills, especially the larger ones, tried to maintain a certain flow of exports at the same level as the market prices so as to reduce the pressure on the domestic market. This was the main reason for the reduction in China's exports in August.
Meanwhile, within the scope of the continuing elimination of out-of-date capacity by the Chinese government, some small blast furnaces, converters and electrical furnaces which were found to have disobeyed the official industrial policies were forced to close down, leading to extremely tight billet supply in the domestic market, thus making it even harder to ensure export quantities. In addition, since Shougang, Anyang Steel, Tiantie and many other mills have commenced production operations on their new hot rolling lines, they have increased their consumption of the slab they produce themselves, resulting in decreased slab quantities available for external sale. This is why semis exports in August showed a sharp collapse and it also explains why semis exports are expected to remain at a low level in the future.
The considerable month on month decrease in China's finished steel exports for August, along with the decrease in semis exports in the same month (both year on year and month on month), has made it less likely that a new export tariff policy will be announced in the short run. According to speeches made by many government officials from the Ministry of Finance and the National Development and Reform Commission (NDRC), the government intends to stabilize its export policies so as to spare enterprises the various difficulties that come in the wake of frequent policy changes.
With regard to China's iron ore imports, a continuous decline was observed in April, May and June 2007. Following the sharp rebound in the July import figures, August again registered a remarkable slump in imports, and this has greatly contributed to the current very tight availability of Chinese iron ore. If no big rise is seen in iron ore imports in September, with the coming of winter mills in the northeastern regions will start building their "winter stock", with the effect of further pushing up iron ore prices which have already reached an historical high.