Latin American imports of Chinese finished steel plunged 35% in Jan-May 2016

By Carolina Curiel (ScrapMonster Author)

July 07, 2016 03:34:28 AM

SAO PAULO (Scrap Monster): The latest trade statistics released by the Latin American Steel Association (Alacero) indicates that imports of finished steel by the region from China dropped significantly during the initial five-month period of the year. This is at a time when finished steel exports from China to the world increased during the period, when compared with the corresponding five-month period in 2015.

As per data, China exported 2.7 million tonnes of finished steel and steel-derivative products to Latin American region during the five-month period from January to May this year. The imports by the region dropped sharply by 35% over the previous year. The imports had totaled 4.2 million tonnes during Jan-May ’15. Meantime, China’s exports of finished steel and steel-derivative products to the world have increased by 7% to 42.5 million tonnes during Jan-May ’16. Latin American region accounted for 6% share of Chinese steel exports during this period.

The Latin American countries imported 316,000 tonnes of steel derivative products from China over the five-month period, falling significantly by 24.2% year-on-year. The region continued to be the largest importer of Chinese steel derivative products. In fact, 11.1% of the Chinese steel derivative products to the world were destined to the region. The other major importers were the Philippines (170,000 tonnes) and the US (168,000 tonnes).

The Central American region received 604,000 tonnes of Chinese steel during the five-month period, accounting for 22% of the regional imput. The other key importers were Chile (458,000 tonnes), followed by Peru (380,000 tonnes).

Flat products accounted for 47% of the total imports of finished steel and steel-derivative products from China. The Latin American imports of flat products totaled 1.3 million tonnes during the initial five-month period of the year. The major flat steel products imported during the period were hot-dipped galvanized coil (357,000 tonnes, 28% share), other alloyed steel sheets and coils (302,000 tonnes, 24% share) and Zinc and Aluminum coated coil (173,000 tonnes, 14% share).

Long steel imports totaled 1 million tonnes during Jan-May ’16. The key long steel product imported by the region from China was bars. The imports of bars totaled 558,000 tonnes, accounting for 56% of the total long steel imports by the region. The imports of wire rods totaled 339,000 tonnes with 34% long steel market share. The region imported 142,000 tonnes of seamless pipes during this period.

Meanwhile, Chinese exports of iron and steel have increased by 6.4% year-on-year during the first five months of the year. The rise in Chinese exports indicates that global supply is likely to remain much higher than demand during the current year as well.

However, the exports growth rate has dropped considerably when compared with the 50% growth reported during Jan-May ’15 relative to the year before that. The drop in exports growth rate is mainly on account of several measures taken by the Chinese administration to restrict exports in order to maintain stability of the iron and steel market across the world. This includes imposition of increased export tariffs on certain products. It must be noted that the country’s State Council had earlier decided to reduce crude steel output by 100 to 150 million metric tons during the five-year period commencing from 2016.