Steel exports are expected to see a slight year-on-year increase in 2019

The General Administration of Customs released China's import and export data for January 2019 on February 14. The data shows that in January 2019, China exported 6.188 million tons of steel, an increase of 632,000 tons compared to the previous month, a month-on-month increase of 11.3%, and a year-on-year increase of 33.3%; steel imports totaled 1.179 million tons, an increase of 173,000 tons compared to the previous month, and a year-on-year decrease of 1.0%. Steel exports have rebounded month-on-month for two consecutive months. In January, steel exports increased significantly year-on-year, reaching a new high since July 2018.

Wang Guoqing stated that the reappearance of export price advantages is the main driving force behind the significant increase in steel exports in January. After a sharp drop in domestic steel prices in November 2018, the low level of steel prices and shrinking profits have made the export price advantage of steel reappear, boosting the enthusiasm of domestic enterprises to export steel.

Monitoring data shows that at the end of October 2018, the export price of Chinese hot-rolled coils was US$550 per ton. At the end of November, December, and January 2019, the export price was US$490-495 per ton, a decrease of US$55-60 per ton compared to the end of October; the price of hot-dip galvanized products was US$665 per ton at the end of October, dropping to US$570 per ton at the end of November, and to US$550 per ton at the end of December and January, a decrease of US$95-115 per ton compared to the end of October.

The overall average export price of steel also shows that the average export price of steel in December 2018 and January 2019 continued to fall for two months, especially in January 2019, when the average export price of steel fell to US$821.86 per ton, the lowest since November 2017.

Wang Guoqing believes that global economic growth in 2019 faces a high probability of slowing down. The International Monetary Fund (IMF)'s World Economic Outlook report released on January 21, 2019, predicts that the global economy will grow by 3.5% in 2019 and 3.6% in 2020, down 0.2 and 0.1 percentage points respectively from the October 2018 forecast. In 2019, China's steel industry's foreign trade will be constrained by the slowdown in international demand growth, and it will be difficult for steel exports to see a significant increase; however, due to the low domestic steel prices, the export price advantage will reappear, stimulating related enterprises to increase export efficiency, so that steel exports will not decrease significantly. It is expected that China's steel exports in 2019 will exceed 70 million tons, showing a slight increase compared to the previous year.