SMM Analysis On China’s Steel Import And Export, Annual Exports Surpassed 90 Million Mt In 2023

Customs data shows China's December 2023 steel exports were 7.728 million mt, down 277,000 mt or 3.5% MoM. Yearly exports hit 90.264 million mt, up 36.2% YoY.

China's December steel imports were 665,000 mt, up 51,000 mt or 8.3% MoM. Annual imports totaled 7.645 million mt, down 27.6% YoY.

China's December steel exports stayed high, with annual exports hitting 90.264 million mt
Despite a 3.5% MoM drop in December, steel exports rose by 43.08% YoY, with annual exports topping 90 million mt. SMM's November survey indicated narrowing HRC export margins since October and recent booking pressure on some mills, cooling December exports slightly. Yet, 2023's price competitiveness and higher domestic supply had mills pursuing foreign orders, pushing annual exports to an impressive 90.264 million mt.

China's trend of low steel imports persisted through December

China's December steel imports remained low, up 8.3% MoM but down 5% YoY, staying at historically low levels. Net exports for December were 7.063 million mt, a 50.3% jump YoY, keeping China in a net export position.

Steel Trade Outlook
The China Federation of Logistics and Purchasing reports the global manufacturing PMI was stable at 48.0% in December 2023, under 50% for the 15th month, reflecting ongoing global economic volatility. Data from the World Steel Association shows that in November 2023, the crude steel production of the 71 countries included in the World Steel Association's statistics reached 145.5 million mt, representing a YoY increase of 3.3%, with production excluding China up by 7.4% to 69.4 million mt, showing a continued YoY rebound outside China.
As of January 11, 2024, HRC export quotes (FOB) were $635/mt from India, $705/mt from Turkey, $610/mt from CIS, and China's at $567/mt. China's HRC export prices were $68/mt less than India, $138/mt under Turkey, and $43/mt below CIS, with its price advantage over India slightly reduced MoM, but slightly increased over Turkey and CIS, maintaining its competitive edge.
SMM reports December steel shipments at 7.5832 million mt, matching Customs data. January's steel export volume is expected to stay high despite a stronger RMB raising China's export prices, still competitive globally. Weak domestic steel prices, high raw material costs, and lower steel profitability mean exports are more profitable, driving mills to pursue overseas orders. January's export data looks positive. However, with China's growing export volume in 2023, five countries launched six trade remedy investigations against Chinese steel, and Mexico ended the year announcing an almost 80% tariff on certain Chinese steel imports. The direction of China's steel exports in 2024 is to be closely watched.