According to the statistics by CIB China on May 19th, owing to the shrinking price difference at home and abroad, China's steel export has witnessed a modest increase recently and the volume for May is expected to nose up compared with last month.
It is known that China's steel exports have dropped evidently since the beginning of this year. The total volume during January to April is only posted at 6.55 million tonnes down by 59.5%YoY. Especially in April a new export low had been set since 40 months ago and there was no export on steel billet that month.
Industry insiders analyzed the soft international demand, enlarging price difference and international trade protectionism as the main drivers behind China's export slump. However, the situation seems to be much better in May. According to the research by CIB China, both export inquiry and orders are climbing up in May which indicates the coming rebound on Chinese steel export.
The shrinking price difference attributing to the overall price increase on the international market is considered to be the first factor promoting China's export. In addition, China's major steel importers like EU and US sped up further to cut their steel production. But the general market demand does not decline dramatically which means China can grasp this chance to push up its export.
Related person with CISA unveiled that on the other hand, in order to stimulate export CISA has already suggested the government to enlarge steel varieties with export rebate. It is likely to be realized. Nevertheless, China's steel export is still facing with a tough situation and this kind of export heading up is just a temporary phenomenon, as most insiders concerned. Export volume is likely to tumble by 80% much more than the originally forecasted 50%.
An analyst noted that in that case, the best way to solve the problem right now is to control production instead of boosting capacity regardless of market demand