- Cargoes from top producer in August are lowest in six months
- China has drawn fire from competitors for record steel exports
Steel exports from China slumped last month to the lowest level since February, offering some respite to world leaders just days after they expressed concern over a growing glut of the metal.
Shipments from the biggest producer dropped to 9 million metric tons from 10.3 million in July and 9.7 million tons a year earlier, according to China’s customs Thursday. Volumes in the first eight months are still the highest ever for the period, gaining 6.3 percent to 76.35 million tons from last year.
As maker of half the world’s steel, China has drawn fire from competitors for exporting its surplus at record levels as domestic growth slows. The Group of 20 leaders wrapped up their two-day summit in Hangzhou, China earlier this week with a pledge to establish a global forum on steel overcapacity.
“Trade frictions are escalating, which may limit China’s ability to ship more,” Xu Ke, an analyst at Huatai Futures Co. in Shanghai, said by phone. “The run-up in domestic steel prices in July and August could have boosted the attractiveness of local sales versus overseas shipments.”
Local prices of reinforcement bar assessed by Beijing Antaike Information Development Co. climbed 4 percent in August, extending their 5.6 percent gain in July. The benchmark steel product used in construction rallied to 2,705 yuan ($406) a metric ton last month, the highest since May, and was at 2,645 yuan on Thursday.
Steel cargoes from China expanded this year as output has proven to be unexpectedly resilient after the government boosted stimulus to prop up its economy. Mills are currently ramping up supply after a series of cuts were lifted, said Huatai’s Xu. Data on August industrial production, including crude-steel output, are due for release on Sept. 13.
The surge in steel exports this year has helped lift demand for iron ore, and China’s imports of the raw material gained 9.3 percent in the first eight months to 669.7 million tons. In August, inbound cargoes were 87.7 million tons from 88.4 million in July and 74.1 million a year ago, customs data showed.