China's Steel Exports Slumped 20 Percent in January Due to Tariffs, Rising Domestic Demand
Yicai Global
/SOURCE : Yicai
China's Steel Exports Slumped 20 Percent in January Due to Tariffs, Rising Domestic Demand

(Yicai Global) Feb. 6 -- China's steel exports continued to fall last month, extending its decline in late 2016. China's steel exports continued to plunge in January 2017 from a year ago, down more than 20 percent, data from research institutions shows. In addition to growing trade frictions, overlapping domestic and foreign market prices are also a primary contributor to the substantial decline in exports.

Chinese steel exports were expected to reach about 7.5 million tons in January 2017, down slightly from last December, reaching a 30-month low, according to January data by Shanghai Ganglian E-Commerce Holdings Co., a steel research firm, on steel exports.

Without doubt, tariffs has become an important factor affecting China's steel exports in recent years. From January to December 2016, China's steel exports were subjected to 48 trade remedy investigations launched by 20 countries and regions, including 32 anti-dumping cases, nine anti-subsidy cases and seven safeguard measure cases, according to monitoring data from Lange Steel Information Research Center. The number of countries filing such cases increased by six in 2016 compared with 2015, and the number of such cases rose by 29.7 percent.

The US Department of Commerce final ruling claimed last Thursday that stainless strip steel and sheet imported from China were subsidized and were dumped into the US market at prices below reasonable rates, leading to further anti-dumping tariffs.

Foreign countries' anti-dumping and anti-subsidy probes against Chinese steel products and punitive tariffs are naturally affecting China's steel exports.

However, the decline in steel exports this January has more to do with better-than-expected domestic demand for steel, Ren Zhuqian, senior researcher at Shanghai Ganglian, told Yicai Global. Domestic prices for steel billets were CNY2,810 (USD410) per ton during the Spring Festival period, putting them almost on a par with those of international market and therefore diverting the supply side to domestic market demand.

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