SHANGHAI, Jul 21 (SMM) - China’s stainless steel imports stood at 271,300 mt in June, a month-on-month increase of 18.03% and a year-on-year growth of 8.6%, according to SMM statistics.

Among them, the imports from Indonesia rose 17.4% MoM, and the proportion remained above 80% in China’s total imports. Among them, the semi-finished products imports rose palpably while that of hot-rolled coil fell.

In terms of export, the export volume in June was basically the same as that in May with a reading of 489,900 mt, up 0.66% MoM and 0.61% YoY. This year's exports have been on the rise since February, and the export volume has also reached a level similar to last year. The demand in the Europe and US grew drastically back in 2021, but due to the energy crisis in 2022 as well as the Fed's interest rate hike, the demand in the European market has weakened significantly.

From the perspective of different countries, the main increase in export volume is contributed by Turkey, Japan and South Korea, while India and Vietnam have also maintained a relatively high proportion. On the contrary, the proportion of European countries has almost halved from 12% to 7%. Reduced demand in Europe is firmed confirmed by PMI readings of major export destinations as well as SMM survey.

At present, the concern is that the weakening European demand and the imports from Indonesian may offset the influence of the on-going production cuts in China. Nonetheless, it seems that the reduced demand in Europe has indeed been compensated by Southeast Asia and other regions, and even East Asian countries such as Japan and South Korea. On the other hand, Indonesian production has fallen in July, so imports may decrease, which will also alleviate the domestic supply pressure.

From the perspective of steel varieties, the export growth in the past two months is mainly found in raw materials for processing such as coils.

To sum up, the export volume in June was still strong, but whether the rising demand in Southeast Asia can continue to make up for the long-standing demand contraction in Europe needs to be observed.