09-08-2016

China ships more than 10 million tonnes of steel as tensions rise

Steel

Steel exports from China held above 10 million tonnes in July as mills in the largest supplier stepped up shipments amid a rebound in prices even as global trade tensions escalate.

Overseas shipments increased 5.8% on-year to 10.3 million metric tonnes, compared with 10.9 million tonnes in June, according to China’s customs administration. Exports in the first seven months rose 8.5% to 67.4 million tonnes, the largest volume for the period, which has seen gains every year since 2009.

While China has pledged to cut overcapacity, it continues to export its surplus at record levels amid the slowest growth in decades, prompting nations from India to the US to impose protectionist measures. Premier Li Keqiang has defended the country’s growing presence on overseas steel markets, saying last month that overcapacity isn’t the fault of a single country.

“Orders from abroad have held up relatively well as steel makers in China have a cost advantage over other producers,” Dang Man, an analyst at Maike Futures Co. in Xi’an, said before the data. “Attention is still on global trade friction as the number of cases against Chinese exports is quite large.”

The nation isn’t being overly affected by the ballooning set of trade cases because most have been brought by countries that don’t import large quantities from China, with many targeting very specific products, Morgan Stanley said in a note earlier this month. To insulate local mills further from the global glut, India last week extended its floor price regime on steel imports for a further two months.

The surge in steel exports this year has helped boost demand for iron ore. China’s imports of the steel-making raw material gained 8.1% in the first seven months to 582 million tonnes. In July, inbound cargoes were 88.4 million tons, the second-highest ever, from 81.6 million in June, customs data showed.

Source: Bloomberg

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