From January to October of this year, the main products and main raw materials of China's steel industry showed a net import trend. Zhang Changfu, vice president of the China Iron and Steel Association, analyzed that due to the slow global economic recovery and shrinking demand, as well as the rise of trade protectionism, China's steel industry's sharp decline in exports and the increase in imports are unlikely to change significantly by the end of the year and next year. This reporter learned from the 2010 China Metallurgical Furnace Information Exchange and Trade Fair held in Ningbo.
In respect of steel products, from January to October, China's exports and imports amounted to a net import of 400,000 tons of crude steel. From January to October, China exported 18.41 million tons of steel and 10,000 tons of steel billets, equivalent to 19.5951 million tons of crude steel exports, a year-on-year drop of 66.28%. During the same period, China imported 14.86 million tons of steel and 4.19 million tons of steel billets, equivalent to 1998.85 million tons of crude steel imports, an increase of 38.04% year-on-year. Zhang Changfu analyzed that the high output of high-capacity domestic steel production has exacerbated the oversupply and that the increase in corporate and social inventory will inevitably bring about fluctuations in the steel market price.
In respect of raw materials, from January to October, China's imported iron ore increased by 13.835 million tons year-on-year, an increase of 36.8% year-on-year. During the same period, domestic iron ore output was 702.6642 million tons, an increase of 36.045 million tons year-on-year. From January to October, the increase in iron production in China increased the consumption of iron ore by 88.26 million tons. After statistical analysis, it exceeded the actual demand of 63 million tons. Zhang Changfu said that the order of imported trade was confusing and it was over-imported, resulting in a large inventory of iron ore in domestic ports, long delays in berthing of seaborne ports, and rising sea freight prices, which eventually led to increased costs for the entire industry.
Ferroalloy, another major raw material for iron and steel production, is a traditional export project in China. It has also been transformed into a net import situation. According to customs statistics, from January to September, China exported a total of 94.58 million tons of ferroalloys, a decrease of 63.28% year-on-year. Exports of bulk alloy products such as ferrosilicon, ferromanganese, and ferroniobium decreased by 75.12%, 90.14%, and 56.49% respectively year-on-year. From January to September, the import volume of ferroalloy products in China increased by 85.62% year-on-year, and it is expected that the import volume of ferroalloy products this year will reach the highest level in recent years. Liu Weiguo, president of the China Ferroalloy Industry Association, said that this change was mainly affected by the financial crisis. The international ferroalloy market saw a sharp drop in demand and the international market price lags behind domestic sales prices. At the same time, China’s ferroalloy exports continued to perform 20% to 25% higher this year. Tariff rates, in the context of low demand and low prices, have led to a sharp decline in exports.
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