Article By Peter Cranfield, WBMS consultant
Chart 1 shows that China’s stainless steel total exports in all forms amounted to 1.9 Mt in January to July 2019 compared with 2.35 Mt in the same period of 2018. This is a substantial decline of nearly 20%. Exports to the largest destination, South Korea, fell by 36% from 405 kt to 261 kt. The former largest export destination, Taiwan, fell by 42% from 432kt to 249 kt. There was a similar trend with Vietnam, a fall of 30% from 274 to 192 kt. India was little changed at 148kt, as was Italy 142 kt and Russia 87 kt. There was a 33% increase to Indonesia from 54 kt to 72 kt. As shown in Chart 3 more than half this increase was in hot rolled coils (HRC). Exports to Malaysia fell 12% to 65 kt and Pakistan was unchanged at 61 kt. Exports to Thailand fell 17% to 56 kt and to Turkey by 54% to 48 kt. China exports to a large number of countries around the globe but these 11 countries accounted for 73% of total exports.
Chart 2 demonstrates that the import data is rather simpler at least in terms of volumes and number of countries involved. Chart 2 shows China’s stainless steel total imports in all forms, which amounted to 0.67 Mt in January to July 2019 compared with 1.22 Mt in the same period of 2018. This is a decline of 45%. It means that China’s export surplus slightly increased from 1.1 Mt in Jan-July 2018 to 1.2 Mt in 2019.
Imports from Indonesia declined by 61% from 807 kt to 316 kt. Over half this fall was in HRC, see Chart 4. There were declines of 25% from South Korea to 106 kt and 15% from Japan to 96 kt. The volumes then become less significant. Other imports were as follows: Sweden 22 kt (+38%), Germany 16 kt (-6%), Italy 14 kt unchanged, Belgium 13 kt (+14%) and Finland unchanged at 12 kt. These nine countries accounted for 95% of all stainless imports into China.
Chart 3 WBMS decided to look in more detail at stainless hot rolled coils (HRC) because in 2018 this was the most important shape in volume export terms, exceeding by some margin all the cold rolled flat categories aggregated together. However in 2019 HRC trade has substantially declined. On closer inspection exports held up well in the first quarter but fell off a cliff in April and have so far shown no sign of much increase.
The 8 countries shown in Chart 3 accounted for 93% of China’s exports of HRC in the 2019 period. Overall total HRC exports fell 42% from 1.0 Mt in the 2018 period to 582 kt in 2019. Vietnam, Thailand, Malaysia and Turkey have cold rolling facilities. The other 4 countries have substantial melting and hot rolling capacity as well as CR mills.
Exports to Taiwan declined by 44% to 217 kt and by 49% to 102 kt in S. Korea. In contrast exports to Italy fell only 7% to 123 kt. Exports to the Asian re-rollers fell sharply: Vietnam 27 kt (-75%), Thailand 22 kt (-37%), Malaysia 21 kt (-46%). Exports to Indonesia more than doubled to 17kt. Exports to Turkey fell by 77% to 12 kt.
Chart 4 shows that China’s HRC imports also fell, by 53% from 538 kt in Jan-July 2018 to 255 kt in the corresponding period in 2019. So the trade surplus in HRC fell from 462 kt to 327 kt in the current year. HRC imports from Indonesia fell by 60% from 408 to 163 kt. Imports from S. Korea fell by 18% to 74 kt and by 80% from Japan to 5 kt. Imports from Finland, Sweden and Belgium were each around 5kt. These 6 countries accounted for all the HRC imports into China.