China imports more semi-finished steel as finished steel exports drop

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In H2 2019, China’s imports of semi-finished steel products have skyrocketed, which is playing out against the backdrop of falling finished steel exports. Chinese producers have been losing their cost competitiveness and consequently market share to other cheaper sources of steel. Chinese producers can take advantage of such low prices in international markets by buying more semis from overseas, which explains the recent hike in billet imports.

Table of contents

  • Executive summary
  • China imports more semis and exports less finished steel
  • It is cheaper to import billet than to buy it domestically
  • No incentive to export finished steel with a relatively stronger domestic market
  • Chinese steel producers are losing competitiveness
    • Higher iron ore cost
    • Higher scrap cost
    • Higher domestic coking coal cost
    • High costs erode competitive edge in global market
  • How does this affect our forecast?

Tables and charts

This report includes 8 images and tables including:

  • Semis imports have been rising since May 2019
  • Finished steel exports have continued to fall
  • Billet is cheaper in foreign markets than in the domestic market
  • No incentive to export rebar as its domestic market is better
  • No incentive to export HRC either, even though its domestic market is weaker than the rebar market
  • Steelmakers would make losses exporting to weaker foreign markets, as they are only making very thin margins in the relatively stronger domestic market
  • Domestic scrap price is remarkably higher than the price in the foreign market
  • China’s coking coal price is also higher than the price in the international market

What's included

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    China imports more semi-finished steel as finished steel exports drop

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