China's Steel Exports to Edge Up in September

SHANGHAI, Sept. 11 (SMM) – Data from China Customs showed that China’s steel exports in August were 4.24 million mt, down 1.9% MoM and down 1.2% YoY. Steel imports during the month were 1.2 million mt, up 3.4% from a month ago, but down 11.1% from a year ago.

Steelease believes the modest decline in steel exports during August should be attributable to the global economic downturn which kept dampening foreign demand, and maintenance operations and production halts at domestic steel mills. China’s steel exports are expected to edge up in September for several reasons.

First, with the onset of peak demand season for manufacturing sector in northern hemisphere, Steelease expects overall demand will unlikely stage strong rebound but should improve slightly compared with August’s level. Meanwhile, European leaders decided recently to take actions to reduce the pressures on Greece and other heavily-indebted so as to ease the European debt crisis which has plagued European countries. Major consumers of China’s steel exports, including South Korea, EU, and India, still reported slower manufacturing growth, but conditions were mitigated somewhat during August. Manufacturing PMI for August was 45.1% in the EU, up 1.1% from July, 47.5% in South Korea, up 0.3% MoM, and remained above 50% at 52.8% in India.

Second, given the continued downturn of China’s exports, premier Wen Jiabao pointed out that measures suitable for local situations should be taken to facilitate steady exports growth while visiting Guangdong to investigate current economic situations, such as stabilization of foreign demand and transformation of foreign trade. The Ministry of Commerce also announced that a series of policies, including adjustment to export rebates, will be introduced in mid-September to boost exports.

Third, steel prices recovered from slump, allowing increased profits for traders which will boost traders’ enthusiasm. However, anti-dumping cases are emerging constantly with Australia recently launching anti-dumping investigation against China’s galvanized sheet and galvalume sheet, leaving any rally of steel exports limited.