China: Steel exports grow over 16% y-o-y in Apr'24 amid soft domestic demand
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China's steel exports witnessed a growth of 16.3% y-o-y in April 2024 reaching 9.224 million tonnes (mnt) as compared to 7.93 mnt in April 2023, as per General Administration of Customs. However, exports fell by 7% m-o-m against 9.89 mnt m-o-m. In addition, during January-April 2024, exports surged by 27% y-o-y to 35.02 mnt compared to 27.50 mnt in the same period of previous year.
Factors driving steel exports:
1. Slow domestic market sentiment due to Qingming holidays: China's domestic market sentiments remained slow due to the Qingming Festival. Market participants were on holidays from 4-6 April resulting in slow market activities. In addition, a sluggish economy along with a struggling real estate sector further pressured mills to focus on exports.
2. Lucrative offers against other exporting nations: Imported HRC offers to Middle East (ME) from China were heard at around $560/t CFR UAE in April, dropping by $15/t CFR against $575/t CFR UAE in March 2024. In addition, few deals were heard reported from China and Japan to ME, while Indian offers were on the higher side to around $600/t CFR UAE.
Meanwhile, China's HRC FOB export offers remained very competitive to $537/t FOB in April. While, India's HRC FOB offers were around $ 562/t FOB, Japanese HRC offers were at $561/t FOB. Cheaper export offers from China compared to other exporting origins resulted in higher export volumes in China. Notably, Chinese mills were also offering HRC to India at around $564/t CNF West Coast India as Indian mills increased domestic HRC prices and a few deals were heard reported at a similar price range, sources informed BigMint.
Outlook: Market participants in China have returned after the Labour Day Holidays, while Shanghai Futures Exchange (SHFE) HRC futures are volatile. Moreover, Indian mills are not actively offering for exports. In the absence of other competitive origins, Chinese exporters are trying to quote prices on higher side. Furthermore, export volumes are expected to remain high in the near term.