China’s steel exports hit 7-year high, pace to remain strong in coming months

China’s finished steel exports over January-October reached the highest level not seen since the same period of 2016, China’s customs data showed Nov. 7, a development, sources said, which is led by weak domestic demand and elevated production.

The country’s steel exports are expected to remain relatively strong in the coming months, as there were no government-mandated steel output curbs for 2023, market participants said.

China’s steel production is likely to remain comparatively higher through the winter, a period when Chinese steel output typically dips, they said. As a result, Chinese steel prices would comparatively remain lower, the participants added.

Strong exports

In October, China’s finished steel exports reached 7.939 million mt, down 1.5% on the month, but shipments were still the fourth largest so far in 2023, and 53.1% higher on the year, the customs data showed.

Over January-October, China’s steel exports increased 34.8%, or 19.29 million mt, on the year to 74.732 million mt, according to the customs data.

Higher exports have been attributed to elevated steel production in China.

Based on data from the China Iron and Steel Association and National Bureau of Statistics, the country’s crude steel output during January-October is expected to reach 878.37 million mt, up 17.8 million mt on the year.

The pace of growth in steel exports over the first 10 months of 2023 might have exceeded production growth rate, indicating Chinese domestic steel demand was on a downtrend amid property sector’s debt woes, some trading sources said.

Coming to the steel sector’s rescue to some extent, overseas buying eased the supply pressure in the domestic market, sources said.

Different scenarios

The last time steel exports in the first 10 months were higher than 74.732 million mt was in 2016, when they were about 93 million mt, according to the customs data.

Poor domestic steel demand and huge steel capacity were behind strong exports both for 2016 and 2023, some trading and mill sources said.

China’s domestic steel market then rebounded strongly in 2017, after a quick and strong boost to its property sector in 2016, while elimination of illegal induction furnaces in the first half of 2017 also helped production efficiency, sources said.

In tandem, the annual average domestic rebar profit margin jumped from $11/mt in 2016 to $110/mt in 2017, S&P Global Commodity Insights data showed.

However, the scenario for China’s current steel market situation and in 2024 is not expected to follow the trends seen in 2017.

The country’s property sector has entered into a long-term structural downtrend as it faces a debt crisis, while declining birth rates would also add pressure on the sector, some trading sources said.

At the same time, China’s crude steel capacity has remained on an uptrend through capacity swaps, they said.

As China’s elevated steel production and lower domestic demand weighs on the sector’s prospects, the domestic rebar profit margin so far in 2023 has averaged at a negative $3.4/mt, S&P Global data showed.

China’s steel production would stay at elevated levels in 2024, but domestic steel demand is unlikely to improve notably as the property sector would continue to struggle with debt woes, marking a huge drag on the overall Chinese steel demand, some sources said.

China’s total steel exports in 2024 might decline from 2023 but would remain at relatively high levels given competitive prices, sources said.


In October, China’s finished steel imports reached 668,000 mt, up 4.4% from September but down 13.5% on the year, according to customs data.

Over January-October, the finished steel imports fell by 30.1% on the year at 6.366 million mt.

As a result, China’s net finished steel exports in the first 10 months increased by 47.6%, or 22.04 million mt, on the year at 68.366 million mt.

Author: Jing Zhang, Market Specialist – Metals