SHANGHAI, May 13 (SMM) - According to China Customs, China’s exports of finished steel products were 5.55 million mt in April 2013, up 5.1% MoM, and up 18.8% YoY. In April, China’s imports of finished steel products were 1.26 million mt, up 2.4% MoM, and up 11.5% YoY. China posted higher exports of finished steel products in April on a monthly basis. Steelease attributes the increase to the delayed production resumption in the manufacturing industry in the Northern Hemisphere, resulting from cold weather. Exports in May are expected to grow slightly for the following three factors. 

 

First, it is still a peak demand period for the manufacturing industry in May, and so demand for steel products will remain robust. The global commodity market has been bolstered by recent encouraging economic figures and the introduction of easing monetary measures in major economies, including an interest rate cut. Domestic steel prices are keeping up with the rising trend. Buying interest from foreign traders and downstream producers are expected to pick up. 

 

Second, manufacturing activities in South Korea, India – major export destinations of Chinese finished steel products – are continuing to improve. In April, the manufacturing PMI in South Korea was 52.6%, up 0.6% from March. Meanwhile, the Indian PMI managed to stay above 50%, despite a drop on a monthly basis. The manufacturing PMI figures in the two countries are expected to remain 50% in May. 

 

Third, monthly output at Chinese steel mills has been high since the beginning of 2013. Domestic downstream demand, however, is recovering at a slow pace. To ease inventory pressures, domestic steel mills will increase exports ahead of a traditional low demand period in the manufacturing sector. A recent Steelease survey finds that major domestic steel mills planned to increase exports from early May, reinforcing our view.