Alexander Gordienko: Chinese exports may hit record levels of 2015

During his presentation at the SteelOrbis 2024 Spring Conference & 90th IREPAS Meeting held in Berlin on April 28-30, Alexander Gordienko, export director of Spain’s CELSA Group, said that, despite gloomy projections, the global economy still sees steady growth, with 3.2 percent GDP growth expected both in 2024 and 2025.

In particular, growth in the EU will rebound from very low levels, with strong EU economies underperforming, while countries such as Greece and Spain are doing much better than expected. Mr. Gordienko pointed out that the US economy is overheated, while the Chinese economy has been struggling with the downturn in its property sector. As domestic demand remains weak in China, its exports will become the main source of growth which will bring risks of trade tensions. On the other hand, the emerging markets are performing strongly, benefiting from the trade tensions between China and the US.

Regarding steel production, the CELSA official noted that, according to the worldsteel figures, global steel production in the first quarter of the current year decreased. In the given period, while China, Japan, US, South Korea and the EU registered declines, steel production increased by six percent in Brazil, by 9.7 percent in India, by 16.3 percent in Iran and by as high as 28.4 percent in Turkey, a fact to which he drew attention.

In 2023, global long product consumption decreased by 5.3 percent, down from the peak of 2021 and in 2024 it is expected to see a 0.5 percent decline, which would be another 12 million mt loss of consumption compared to the previous year. Looking at the products individually, wire rod was the one which saw the biggest decline, while in 2024 wire rod consumption is expected to decrease by 8 million mt.

Mr. Gordienko pointed out that, since the last conference, prices have remained stable, reacting very slowly to changing demand and raw material prices. He mentioned that capacity utilization rates have been very low and small regional niches have appeared in the market and these are being defended by tariffs and quotas. Looking at the evolution of the rebar price spread, CELSA’s export director said that 2023 was tough on steel producers and that 2024 will be even tougher, with demand not expected to recover until 2025. He added, “It will take some extraordinarily good news to revive demand, but no good news yet unfortunately”.

Remarking that the Chinese government has started investigating possible fraud in the non-VAT export trade, Gordienko said that it is his personal view that, although the investigation may cause a temporary slowdown in exports for a couple of months, the Chinese market will find a way to continue to export as it is the major source of growth for the country given its weak domestic market. In March this year, China exported 9.9 million mt, which would project 103 million mt of exports for the whole year. Based on the export volumes in the first quarter of the current year, Chinese exports are expected to reach the record levels of 2015.