SHANGHAI, Nov. 11 (SMM) -- According to the latest data from China Customs, China’s exports of finished steel were 3.82 million mt during October, down 390,000 mt or 9.3% MoM, but up 33.6% YoY. Imports of finished steel were 1.2 million mt in October, down 130,000 mt or 9.8% MoM, but up 5.3% YoY.
China’s steel exports in October were down 390,000 mt from September, which was in line with Steelease’s previous forecast. Downstream demand for steel in foreign countries remained weak given a global economic slowdown and lingering European debt crisis, causing China’s exports of finished steel to fall. Steelease predicts steel exports in November will continue to fall slightly due to the following three reasons.
First, the European debt crisis is spreading from Greece to Italy and other euro zone countries, and the US economic growth is slowing as well, both signaling a global economic slowdown. In addition, most emerging economies are implementing the tightening monetary policy in order to combat high inflation, which exerts negative impact on the real economy. As a result, the growth of overall steel demand slows in the international market.
Second, China’s currency continues to appreciate, with RMB against the US dollar already reaching 6.33 recently, which erode the price advantage of China’s finished steel. In addition, export prices for finished steel offered by members of Commonwealth of Independent States fell sharply recently, which further weaken the export advantage of China’s finished steel.
Third, the growth of manufacturing sector in major China’s steel consuming countries like euro zone countries and South Korea continued to slow. Euro zone manufacturing PMI was 47.1% in October, while South Korea’s manufacturing PMI was 48.0%, both remaining below 50% for three consecutive months. The contracting manufacturing sector will further weaken demand for finished steel.