China’s steel exports snapped a five-month decline and rebounded in December 2021, but imports fell due to sluggish steel demand. Full-year 2021 exports also increased after a weak 2020, and imports were down from their surge in late 2020, Kallanish notes.
In December, China’s steel exports rebounded by 15.02% from November to 5.026 million tonnes, which was also a 3.6% increase on-year. Steel mills resumed production after meeting their annual output reduction targets in November, and the increase in supply has meant greater export availability. Traders took advantage of this with short selling even as mills held their prices steady.
According to customs data, finished steel product imports in December declined by 26.93% from November to 1mt. Chinese domestic demand has been very weak and interest in imports fell away towards the end of last year despite very low domestic production. This data does not include imports of semi-finished steel, which have followed a similar trend.
Over the full year, exports were up 24.6% y-o-y to 66.895mt. Although China had expressed its intention to limit exports to advanced steel products, and removed tax rebates on some products, traders still found more opportunities to export last year. Overseas demand recovered from 2020 lows, while Chinese steel output was high during the first half. Covid-19 waves in Southeast Asia however meant that other destinations such as South America grew in importance.
Full-year imports were down 29.5% y-o-y to 14.268mt. Imports remain high by historical standards, but could not replicate the surge of late 2020, which saw China briefly become a net importer of steel. This was mainly due to much weaker demand in the second half of 2021 compared with a year earlier.