China’s steel imports soared 26%YoY in March as coronavirus knocks foreign demand

SHANGHAI, Apr 16 (SMM) – China’s imports of steel products soared last month as coronavirus containment measures dealt a hefty blow to foreign demand and pulled prices overseas lower.

Data published by China’s General Administration of Customs on Tuesday showed that China imported 1.14 million mt of steel products in March, up 26.3% from a year earlier. Total imports in the first three months of 2020 came in at 3.18 million mt, with a year-over-year increase of 9.7%.

Chart 1: China’s imports of steel products

Source: China’s General Administration of Customs, SMM

The lion’s share of China’s steel imports is flat products. Flats accounted for 84% of China’s total steel products imports of 12.3 million mt in 2019, according to SMM calculations based on customs data.

China prices of flat steel products far exceeded prices overseas, as prices overseas slumped on significant demand losses caused by the global coronavirus pandemic outbreak which escalated in March.

Chart 2: International export quotes for hot-rolled plate and coil and China’s export quotes

Chart 3: China’s export quotes for hot-rolled plate and coil and domestic spot prices (4.75mm)

Source: SMM

Healthy domestic demand and cost concerns, meanwhile, deterred Chinese steelmakers from slashing their selling prices to compete with foreign resources.   

At least 250,000 mt of flat steel products have been ordered by Chinese traders from foreign countries including Russia, India and South Korea since mid-March, and costs that include delivery fee ranged from 3,000 yuan/mt to 3,200 yuan/mt, SMM research found.

Overseas steel prices are still falling, which will continue to drive flows to China.