(Jan 14): China’s steel exports surged to an all-time high in December, rounding off a record year in which overseas shipments defied mounting trade pressures and expectations of a slowdown.
Exports of steel products climbed to 11.3 million tonnes last month, surpassing the last peak hit in 2015, according to Chinese customs data on Wednesday (Jan 14). That pushed annual shipments 7.5% higher to a best-ever 119 million tonnes.
The export boom has endured in spite of a wave of protectionism across the world that’s seen anti-dumping duties slapped on Chinese products. The industry has managed to circumvent the restrictions by pursuing markets with fewer barriers, such as in the Middle East, and pushing more semi-finished products that don’t face the same controls.
Steel exports have helped offset cooling domestic demand as the country’s longstanding property crisis continues to weigh on the market. The jury’s out on whether Beijing’s latest efforts to rein in shipments, in the form of a new steel licensing regime, will help tame growth this year or prove to be just an administrative tweak.
“It’s still the seesaw effect — seasonal weakness in domestic demand boosted exports in December,” said He Jianhui, an analyst at SDIC Futures Co. “Steel mills rushing to export before China’s new licensing system kicks in is also contributing to the rise.”
Still, He expects the licensing impact to be limited as costs will likely be borne by overseas buyers given that domestic prices are already so low.
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Iron ore, the chief ingredient for steelmaking, also posted record trade figures for last year. Chinese imports rose 1.8% to a high of 1.26 billion tonnes, a third year of increases, according to the customs data. Still, a buildup of ore in port stockpiles has become more pronounced in recent months, suggesting demand from steel mills has begun to lag.
Singapore iron ore futures were flat at US$108.30 a tonne at 1.33pm local time. Yuan-priced futures on the Dalian exchange and Shanghai steel futures gained.
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