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Kallanish Kallanish

Knowledge matters Knowledge matters

September, 29th 2020

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JUL 27

Indian billet pushes China into net imports


China was officially a net steel importer in June for the first time since 2009, customs data shows. The move was driven by both weak exports and strong imports, but in particular by a surge in imports of Indian semi-finished steel, Kallanish notes.

China exported just 3.703 million tonnes of semi-finished and finished steel in June, down 15.9% month-on-month and 30.2% year-on-year, according to detailed customs data. Total imports however surged 105% m-o-m and 315% y-o-y in June to 4.367mt. That left China a net importer of 663,054t of steel. Net exports had topped 10 million tonnes/month in 2015, and China was last a net importer in July 2009. June 2020’s figure is the largest net import of steel since May 2009, when net imports topped 1mt. 

The change came overwhelmingly because of the import of semi-finished steel. While finished steel imports jumped 46.8% m-o-m and 98.9% y-o-y, semi-finished imports surged 193% m-o-m and 2,213% y-o-y to 2.488mt. In particular, imports from India leapt 653% m-o-m to 801,211t. Indian billet accounted for 32.2% of China’s semis imports in June, compared with only 12.5% in May. 

Russia had accounted for 30.2% in semis imports in May but only 22.7% in June, despite a 121% m-o-m increase to 565,897t. Vietnam meanwhile saw its semis volumes into China steady at around 166,000t, but tis share fell from 20.6% in May to just 6.7% in June.

China’s strong steel demand this year has been fuelled by its post-covid spending spree, and this is expected to continue through the autumn. Its imports have also been supported by weak demand outside of China. While some countries are now seeing a slow recovery in steel demand, overall demand overseas remains weak. The pace of recovery in countries such as India may be key in determining how long China can remain a net importer.