Wednesday, December 06, 2017

Falling Chinese steel exports

So far this year, Chinese crude steel production has been racing upwards and if the 6% growth seen so far continues to the end of the year, the country will have produced more than 851 million tonnes of steel which would be a new record level. Unlike in past years, this growth in output is being channelled into internal infrastructure demand. ISSB have reported earlier in the year that Chinese exports have been falling but this decline has actually been accelerating as the year progressed. The year started with monthly year on year falls of around 25% but September saw a 42% decrease and the October decrease of 36% to 4.9 million tonnes represented the lowest monthly total since February 2014.

The decline has been most evident in long products with exports in the year to date down 59% when compared to last year. The decrease in flat product exports has been much more modest in the same time period, at just under 8%. There was a 41% decrease in shipments to the Middle East, exports to other Asian countries were down 33% and shipments to the EU fell by 35%. Despite this, China still managed to grow exports to some regions. Shipments to South America were up 2%, exports to Russia increased by 27% and interestingly shipments to the three NAFTA countries increased by 10%, mainly due to elevated levels of steel exported to Canada. Exports to the US remained broadly flat but there was a large fall in 2016 following implementation of anti-dumping legislation.

The hike in Chinese steel demand took most of the steel community by surprise this year and although there are currently no signs that the government is reducing its spend on infrastructure, it seems logical to assume that this rate of growth cannot continue indefinitely. Indeed, the World Steel Association is currently forecasting no growth at all next year, with demand predicted to be flat. It could well be that as with this year, this growth figure is on the conservative side but if not, given the sheer volumes involved, it only takes a small percentage decline in demand levels for global markets to be flooded with Chinese steel once again.

You can download a file showing monthly Chinese exports here or alternatively visit ISSB for more information on steel.



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Monday, November 20, 2017

Steel industry message board

The web team at Steelonthenet.com have launched a steel industry message board at http://forum.steelonthenet.com. Site visitors may post news, event information, recruitment info, classified ads and other messages on the forum.
There is also a technical section for metal sector questions and answers.

Feel free to visit us at http://forum.steelonthenet.com.





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Tuesday, September 19, 2017

The steel sector in Vietnam

When compared to its larger Asian neighbours, Vietnam is a relative minnow in terms of its steel market but it is also the fastest growing in the region. In the five years to 2016, apparent consumption has more than doubled to 22.3 million tonnes with a 22% growth in last year alone. This growth has seen a similar rise in Vietnamese imports which have also more than doubled in the five year period to 2016 to reach 19.5 million tonnes. As would be expected, by far the largest external supplier to the country is its neighbour China, accounting for 60% of all imports last year. Vietnam is also an important market for Chinese producers, being the second largest behind South Korea.

With a steady increase of over 6% in the country’s GDP forecast for this year, a similarly favourable outlook for the construction industry and an automotive market that was the second fastest growth market globally last year, it would seem that Vietnam is an important market for Asian steel producers going forward.

This may not actually be the case, however. Traditionally Vietnam produces relatively large amounts of long products as well as cold rolled and coated flat products. These producers rely on hot rolled feedstock from abroad, however, as the country lacks the facilities to produce HRC, which makes up around half of all imports into the country. This is a situation that the authorities in the communist nation are looking to address. According to the Vietnamese Steel Association’s Vice Chairman, in the next five years, the trade deficit in the steel industry is expected to decrease as two steel makers, Hoa Phat and Formosa, start to produce HRC. In order to achieve this aim, the Ministry of Industry and Trade is going to apply trade defence measures to ensure fair competition with import products.

So far this year, Vietnam also has the fastest growth in steel output of any country in the world. In the first half of 2017, crude steel production has doubled to 4.7 million tonnes. This has come at the cost of imports, which have declined by around 20% in the same period, the first year-on-year decrease in imports since the fallout from the global recession post-2018.

It would seem then, that the measures put in place to boost the domestic steel industry are working, and at the detriment of imports from overseas suppliers. So far, given the strength of the steel market in China, this has not had a detrimental effect on the world market due to displaced tonnage but another fast developing steel market investing in internal capacity and erecting trade barriers cannot be a long term benefit for the global industry.

The text above was prepared by ISSB.

You can download a file showing exporters to Vietnam last year by visiting the ISSB website.


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Tuesday, August 29, 2017

Price of steel

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Thursday, August 03, 2017

Chinese export activity

Global crude steel production mid-way through 2017 was 4.5% higher than in the first 6 months of the previous year. Despite much talk about cuts in Chinese capacity, Chinese crude steel production grew by a marginally higher amount. The growth in Chinese production is attributed to the government-led infrastructure push which has maintained very strong demand levels from the construction sector, fuelling demand for products such as rebar and sections. Infrastructure demand does not appear to be weakening with Chinese crude steel production growth in June alone reaching 5.7%, significantly ahead of the rest of the world figure of 0.7%.

The strength of Chinese domestic demand has also had an impact on export levels. In addition to crude steel production growth of 4.6% in the first half of 2017, export volumes have reduced by more than 28% as product is diverted to the domestic market. This trend looks set to continue with the June figure alone reflecting a collapse in export volumes with levels down by nearly 38% year on year, albeit against a very strong June 2016 figure. Export volumes have been trending downwards, relative to the previous year, for the past 10 months.

This decrease in exports has not been seen uniformly across all products, however. It is clearly the products commonly used in the construction sector which have seen the largest decline with exports of hot rolled bars and flats down by 67%. In contrast, flat products have actually not seen much of a decline at all with exports of specific products growing year on year. Exports of CR, for example have grown by 30% and HDG is 4% higher than in the previous year.

A closer look at HDG, one of the products where exports have grown, indicates that Chinese producers have been targeting certain European markets. Shipments to Italy, the UK and Spain have grown by 32%, 42% and 88% to 250K tonnes, 218K tonnes and 194K tonnes, respectively, in the first half of the year. The need for export growth in this product has been encouraged by the decision by Vietnam, the second largest market for Chinese HDG, to impose anti-dumping duties as high as 38% on the product.

Despite the fact that Chinese exports levels are in decline China continues to fill the role of the world's main exporter, with levels more than double those of Japan, the second main exporter. Chinese export activity in 2017 is still likely to exceed 70 million tonnes and so will continue to have a serious impact on the fortunes of the global steel industry. In addition, as more and more markets decide to erect trade barriers to Chinese steel, this is likely to lead to further spikes in exports of certain products to some markets, particularly those less inclined to enact strong anti-dumping legislation.

The text above was prepared by ISSB.

For a file showing Chinese exports split by product for the first half of the year, please visit ISSB for more information on the global steel industry.


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Thursday, July 06, 2017

Growth in Indian steel exports

Much has been made of the meteoric rise of Chinese steelmaking over the past decade but as we have discussed before this peaked in 2014. There is another major Asian steel producer, believed to be the lowest cost major producer in the region, that has more than doubled crude steel production since 2005 and is continuing to grow, posting a record 95.6 million tonnes last year, a growth of 7% compared to the global growth rate which was just 1%. After the record tonnage posted last year, in the first five months of 2017, Indian crude steel production grew by another 7%. At this point in 2018, if the rate of growth stays the same, India will have overtaken Japan to become the second largest producer of steel in the world.

This growth in steel production has coincided with a decline in imports. At just under 10 million tonnes, imports are relatively modest for a country of this size and last year they collapsed by 25%. This decline has continued into the first quarter of 2017 with Q1 imports declining by another 43% year on year with falls seen across most products. There have been declines in supplies across most origin countries but Brazil and China seem to have been hardest hit. Whilst China is still, just about, the largest supplier of steel to India, imports have decreased by 64% so far this year as anti-dumping legislation has taken effect.

Conversely there has been a huge increase in exports. Last year there was a 37% growth in exports and at 10.3 million tonnes, the country became a net steel exporter for the first time. So far this year, export growth has accelerated considerably and Q1 saw a 157% hike in exports to more than 5 million tonnes which, if maintained for the rest of the year, would make the country the 6th largest exporter in the world. The growth has mostly come from HRC, CRC and semis with the EU accounting for the bulk of this increase. Indeed, in Q1 alone, India increased exports to the EU by more than 1.2 million tonnes with Italy, Spain and Belgium seeing most of this growth.

According to the union minister of steel, the country is targeting a trebling of last year's production total by the end of 2031 with the focus being on higher-value finished products. Although projections for internal steel demand are also high, it seems clear that a proportion of this growth will make its way into exports.

We have a situation where India is likely to become the second largest producer of steel in the world next year, where imports are dropping, being discouraged by robust anti-dumping legislation, and exports are set to more than double, with EU markets being the main targets. Having been a net steel consumer in the past, India is now becoming a major supplier to the global market, at least in specific product areas and to certain markets.

For a file showing Indian exports by product, please follow this link or visit the ISSB for further information.

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Saturday, June 10, 2017

Iranian steel exports on the rise

At just under 18 million tonnes last year, Iran accounted for more than half of all the steel produced in the Middle East and is becoming an important player on the world stage. It is also growing rapidly with production up 90% over the past ten years. This growth has continued into this year with crude steel production in Q1 increasing by 13% year on year, more than double the global rate of growth.

Iran, as with many rapidly developing steel producing nations, has traditionally imported more than it exported but, partly due to its chequered relationship with the international community, the country is also more self-sufficient than many nations as it is unable to rely on being able to access Western products under sanctions. Imports of around 4.5 million tonnes per year are dwarfed by the domestic production of 18 million tonnes. Unlike imports, which have remained fairly stable at this level over the past few years, the country has started to export more tonnage as it finds itself less encumbered by international sanctions.

In 2016, for the first time, Iran exported more than it imported with exports of 5.7 million tonnes representing a 49% increase over the prior year This is a trend that has continued into 2017 with Q1 exports showing a further 20% growth when compared to Q1 2016. The vast majority of these exports, some 79% of the total so far this year, have been ingots and semis but the country has also exported significant tonnage of rebar and heavy sections.

As would be expected, Iran has traditionally exported these semi-finished products to other countries in the Middle East and North Africa but so far in 2017 it is notable that Iranian producers are becoming bolder in their search for external markets and the main growth areas have been Thailand, Taiwan and Indonesia. The same cannot be said for the growth in exports of rebar and heavy sections with the increase in shipments instead heading to Afghanistan and Iraq, no doubt filling demand resulting in efforts to rebuild in those nations following years of turmoil.

Conversely in Q1 this year, after a few years of stable tonnages, imports nearly halved despite a rise in demand. Traditionally the country is an important market for Russian, Chinese, Indian and Korean flat products but evidence suggests more or both HR and CR products have been sourced internally.

With enviable reserves of natural resources, being favourably situated between Europe and Asia, and having a growing internal steel industry, Iran has the potential to be a significant force on the global market. Incumbent president Hassan Rouhani's recent re-election suggests there is a desire within Iran to integrate further into the international community, thereby increasing the risk of potential disruption to the international steel market from Iranian steel; but the current US president's recent comments during his visit to Saudi Arabia suggests that the USA may potentially not be a viable market for Iranian goods should he enact embargos against the country, meaning they would likely have to look east to Asia or west to Europe for markets for their growing exports.

This report was prepared by the Iron & Steel Statistics Bureau, UK. Please contact ISSB for further information

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Wednesday, February 08, 2017

Price of steel tinplate

Did you know that we shown monthly tinplate prices on our website?
For the latest world tinplate prices, visit us at http://www.steelonthenet.com/steel-prices.html.

Better still why not subscribe to our steel price service, and get access to steel prices for the last 15 years?  
The cost is just $120 per year.

Regards.

Andrew M Kotas

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Tuesday, February 07, 2017

Aerospace steel news

Looking for aerospace steel news – or other high strength metal sector news?

Andrzej M Kotas

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Thursday, December 29, 2016

Rebar prices

We now show historic steel prices on our website including rebar prices as well as HRC, CRC and other price data.The historic data goes back to year 2001 and is shown monthly.

blogger@steelonthenet.com

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