International Steel Mills

What Will China Be Able to Export by the End of 2014?

Written by John Packard

Earlier today one of the steel analysts shared the most recent world production data for the month of August. Chinese mills now produce 51.1 percent of all of the world”s steel. However, the Chinese markets are slowing and the question is what (or where) will the Chinese mills be able to ship steel by the end of this calendar year?

John Anton, Steel Director for IHS Global reported at our recent Steel Summit that the Chinese steel mills will have no choice but to idle excess capacity. The net result, in his view, was going to be a spike in benchmark hot rolled prices of up to $750 per ton during 2014. He also assumes in his forecast that the U.S. steel mills will file dumping suits on light flat rolled steels (cold rolled and coated).

Steel Market Update saw a report out of China on Saturday that spoke of 2014 being the peak of Chinese exports. It was reported by that China exported 56.38 million metric tons (62.15 million net tons) of steel products so far this year. This is up 34.3 percent according to the article which was based on comments made by China Iron and Steel Association deputy secretary, Mr. Qu Xiuli.

Mr. Xiuli went on to say that the growth rate for exports will keep rising for the rest of 2014 before pulling back due to “international trade frictions.”

Baosteel president, Mr. Xu Lejiang was quoted as saying, “We’ll have a peak year for steel exports this year. The developing regions such as Middle East, Africa, Southeast Asia and Eastern Europe, will be the main target regions for China steel exports.”

We have spoken to a number of traders/importers of Chinese steel here in the United States and we heard that the Chinese suppliers are backing away from being responsible for potential future duties which might be leveled against Chinese flat rolled products. This has caused most to shy away from Chinese steel which would be slated to arrive during late 4th Quarter or into the 1st Quarter 2015.

One of our trading contacts for both iron ore and steel advised Steel Market Update on Friday of this past week:

“The market is driving the prices. Maybe the US cannot see the Global Steel Market John, and seems to be in its own bubble, but all other markets are hemorrhaging.

“If you recall, we discussed this some time ago about WHAT WILL CHINA BE ABLE TO EXPORT at the end of 2014 with all of the Anti Dumping Cases being filed. We now hear that the CRC and Coated Dumping case against China for US market is coming in next few weeks. This is 150,000mts per month. Other regions are also making filings against Chinese Steel as well, moreover, the Domestic market in China is the worst I have seen in all my years being here John.

“You ask about Steel offers, no one dares offer CRC or Coated products to USA now. If you see any offers, then they will pay dear later on if these cases are filed and surely approved.

For EU, the low Euro is making any business impossible. Right now, only the Middle East is open, and you can imagine how large this market can be for Steel.”

Something has to give…

Latest in International Steel Mills