Do Falling Chinese Exports Mean Good News for US Steel?
Falling Chinese steel exports
Previously, we learned that Chinese steel production rose year-over-year (or YoY) in the first two months of 2017.
Given the steep rise in Chinese steel production and modest demand indicators, one would have expected a tsunami of Chinese steel exports. However, that hasn’t been the case.
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China’s steel exports fell almost 30% YoY in February. Chinese steel exports have witnessed double-digit yearly falls for six consecutive months.
In absolute terms, February 2017 steel exports were at their lowest levels since February 2014. Lower Chinese steel exports have helped restore some much-needed sanity to international markets.
Positive for steelmakers
The European Union has slapped anti-dumping duties on some Chinese steel products. India has set a minimum import price for steel products to fend off cheap Chinese steel from its borders. As outbound locations continue to dwindle for Chinese steel products, we’ve started to see some moderation in the country’s steel exports.
However, we also need to consider the rise in Chinese steel inventories. We saw a steep rise in China’s steel inventory between January and February 2017. Though the country’s inventory fell in March, it’s still risen handsomely on a year-to-date basis. It will be interesting to analyze China’s March steel production and demand indicators to gauge whether inventories have fallen due to lower production or higher demand.
Keep visiting our Steel page for ongoing updates on this industry.