Shanghai, May 14 (SMM) - According to China Customs, China’s exports of finished steel products were 4.67 million mt in April 2012, down 7.2% MoM, and down 2.1% YoY. In April, China’s imports of finished steel products were 1.13 million mt, down 140,000 mt MoM, and down 17.5% YoY. Chinese finished steel exports remain high in April, despite a month-on-month drop of 360,000 mt in April. The manufacturing industry in overseas countries started to recover in March, with orders growing, leading to moderate declines in steel exports. April is still a traditional peak demand period for steel products, but purchases dropped over March after earlier stockpiling. Steelease expects Chinese finished steel products exports to drop in May 2012 due to the following four factors.
First, May is a seasonal peak demand period for the manufacturing industry, but demand from some sectors has waned, and this will reduce overseas demand for steel products compared with March and April. Meanwhile, reignited market concerns over the European debt issues and the unfavorable US employment data will weigh on demand for steel products.
Second, the manufacturing industry in countries in the Northern Hemisphere will gradually enter a traditional low demand period, as the weather turns hotter. In April, the manufacturing PMI in Korea came in at 51.9%, with a sign of slowing, though the reading stayed above 50. The European April manufacturing PMI was 45.9%, down 1.8% from March. The reignited European debt issues cast a shadow over the recovery of the manufacturing industry.
Third, domestic finished steel prices dropped, but ex-works prices saw no marked declines, leaving no price advantages of some domestic finished steel products in overseas markets. Moreover, downstream producers will be wary of purchases due to continuous price declines, and speculative activities will also wane.
Fourth, some countries launched anti-dumping investigations over Chinese steel products recently. Brazil, for instance, initiated an anti-dumping investigation over cold-rolled plate/coils and low-carbon heavy plates, originating from China and other countries. More anti-dumping and anti-subsidy investigations will be carried out over Chinese steel products in the future, to protect their own steel industry.