China will cut steel exports in 2021

Steel exports from China will fall this year due to government policies to reduce or maintain crude steel production at 2020 levels, said one executive at major producer Hebei Iron & Steel (Hesteel).

Steel exports from the country are expected to decline in 2021 compared to last year, while imports of finished and semi-finished products are expected to increase, said Mu Guoqiang, head of Hesteel's steel imports and exports, during a panel discussion on Singapore's virtual exchange. Singapore International Ferrous Metals Week (SIFW) 2021.

This is in line with Beijing's goal of achieving carbon neutrality by 2060, which will require its steelmakers to cut production during this period.

The mid-year policy change will require a significant slowdown in steel exports from China, which rose 30% to 37.38 million tonnes in the first half. This is 74.76 million tons on an annualized basis, which is 39% more than in 2020, 53.68 million tons were exported.

Chinese steelmakers, especially state-owned enterprises like Hesteel, have no choice but to pursue a policy of cutting production and exports, he said.

Moo's views are consistent with those of the market participants surveyed by Argus. Local authorities have already informed the plant in East China that steel exports will not increase compared to last year. Another mill in the same region was forced to shut down six blast furnaces after its first half production volumes significantly exceeded those of the previous year. According to market participants, the plant has stopped making export offers and will only negotiate on an individual basis.

Major Chinese mills have stopped offering coil exports, forcing Vietnamese buyers to pursue Indian deals that [raised the Asean Hot Rolled Steel Index (HRC) yesterday by $ 8 /t to $ 918 /t] (HRC).

Mu said domestic steel prices in China are well below overseas steel prices, but her businesses also face barriers to loans and high-value raw materials, leaving no profit to businesses, especially large producers. Argus Chinese HRC Shanghai yesterday stood at 5,780 yuan /t ($ 893 /t) ex stock, while the domestic HRC price in the US Midwest is much higher at $ 2006.21 /t.

Others are seeking to fill the supply gap left by China in the marine steel markets.

The potential for cheaper steel exports from India to Asia could pose another threat to global steel markets, including China, Managing Director of trading firm Duferco Subhendu Bose said in a panel discussion. Many ships on