Export of Chinese Steel Pipe May Continue To Rebound in the Short Term

According to data released by the General Administration of Chinese Customs, from January to February 2021, China exported 10.140 million tons of steel, an increase of 29.9% year-on-year; from January to February, imports of steel pipe were 2.395 million tons, an increase of 17.4% year-on-year (see below figure)

Since the data released this time is the cumulative number from January to February, we use the total data of the last two months of last year to observe the chain changes. From November to December last year, 9.255 million tons of steel were exported and 3.229 million tons were imported. The comparison shows that the export trade generally continued the trend of rising exports and falling imports.

The epidemic situation has gradually eased, many countries have maintained strong fiscal and monetary policy support, and the trend of global economic recovery has strengthened. According to data from the China Federation of Logistics and Purchasing, the global manufacturing PMI has remained in the expansion range for eight consecutive months. In February this year, it increased by 1.2 percentage points from the previous month to 55.6%. Among them, the European manufacturing PMI rose by 2 percentage points to 56.1%, the American manufacturing PMI rose by 1.8 percentage points to 59.3%, and the Asian and African manufacturing industries grew at a stable rate, with little fluctuation in the PMI.

In the later period, many countries will continue to introduce corresponding stimulus plans. In the minutes of the monetary policy meeting announced by the European Central Bank in February, it was believed that sufficient monetary stimulus measures are still necessary; the US fiscal stimulus is expected to rise, and Biden’s $1.9 trillion stimulus plan was approved by the Senate. , Infrastructure plans are also being planned; the Indian government budget allocates funds for infrastructure construction, and the South Korean government’s policy to expand housing supply is conducive to boosting demand for steel.

At present, Chinese steel exports still have the price advantage, and the export order index has rebounded sharply, and steel exports may continue to increase in the short term. In terms of imports, due to the relatively loose supply and demand in the domestic market, the price advantage of imported steel is not yet obvious, and steel imports are expected to remain low.

In February, the Ministry of Industry and Information Technology proposed to study and formulate a production reduction plan, and demand is expected to rise steadily. If crude steel production declines, there may be a gap in production and demand in the domestic steel market. There are rumors in the market that the export tax rebate for sheet steel will be cancelled and steel exports will be suppressed to a certain extent.