Chinese Steel Exports Up 10.9 Percent Even Without Discounts

Exports of Chinese steel products rose 10.9 percent in April from the previous month. Chinese manufacturers have managed to cut production costs despite the cancellation of the export discount on boron-doped steel products. Customs data showed that China is seeking to rein in exports to bypass trade frictions and cut production in order to combat pollution. However, the fall in iron ore prices helped Chinese steelmakers maintain a stock of cheap products in overseas markets.

Data from the General Administration of Customs show that exports in April rose to 8.54 million tons from a year ago. The total volume in the first four months rose 32.7 percent to 34.31 million tons. The China Iron & Steel Association expects the country's exports to be able to remain competitive and are unlikely to fall much this year due to lower production costs and strong international demand.

An analyst at Nashua Futures in Hangzhou said "Low costs in China and the closure of some overseas factories have helped boost China's exports." Steel demand in China remains subdued amid a slowdown in the economy. That being said, there has been a 3.5 percent decline in rebar prices in April, when construction activities tend to pick up steam after the cold winter season.

Smelters increased production at record low prices, which helped improve profitability. Iron ore stocks in ports at the end of last week fell to their lowest level of 96.85 million tons since mid-February.