Steel outbound from China spikes in March

As steel mills in China have continued this decade to churn out product at a pace that has the nation making more than half the world’s total, steelmakers in other parts of the world have wondered when the nation’s ability to consume that much steel would waver.

Skeptics point to China's diminished market for apartment towers and its largely built out rail and highway infrastructure, and counterpoints include the nation’s ongoing status as the world’s workshop and, increasingly, maker of exportable vehicles.

“With domestic demand not recovering as much as expected, China’s exports of steel products rose by 25.35 percent in March year on year to 9.89 million tons, the highest since July 2016,” Reuters reports.

That monthly export figure is exceeded by monthly production only in China itself, which made more than 80 million metric tons of steel this February, and in India, which produced 11.8 million metric tons this February.

Citing data gathered by China’s General Administration of Customs (GAC), Reuters says in the first quarter of this year, Chinese steel producers exported 25.8 million tons of product, the highest figure for a first quarter since 2016 and marking an export increase of 30.7 percent year on year.

Although China is a minor contributor of imported steel to the U.S. directly, its ability to furnish finished steel to some markets and semifinished steel to rolling mills elsewhere can affect the demand for both American-made steel and ferrous scrap shipped from the U.S.

The U.S. Department of Commerce has had conversations with counterparts in Mexico regarding its potential role in acting as a transshipment point for Chinese steel and aluminum that could find its way into the American market without having been hit with a tariff.

A source contacted by Recycling Today says Commerce Department investigators also may wish to take into account the possibility of Chinese steel plate (or even block assemblies from China) ending up in Korean vessels ultimately making their way into the U.S. shipping industry.

“This is actually already happening,” the contact says, indicating it is part of the reason the United Steelworkers has requested a related Section 301 investigation. “This kind of circumvention will negate the U.S. lawmakers’ efforts to rein in these unfair trade practices."

In China, according to Reuters and data from Shanghai-based consulting firm Steelhome, steel mills spent early 2024 importing iron ore and expecting a stable to growing domestic demand for their metal. Instead, according to Amy Lv and Andrew Hayley of Reuters, “Iron ore inventories at major Chinese ports rose 5.3 percent to 142.1 million tons by the end of March, the highest since late February 2023.”

The Brussels-based World Steel Association (Worldsteel), as part of its Short Range Outlook steel demand forecast for this year and next, reports steel demand in China in 2024 will remain around the level of 2023, but in 2025 it sees Chinese steel demand hitting a downtrend with a 1 percent decline.

In the meantime, Worldsteel indicates mills in China made 1.6 percent more steel in the first two months of this year compared with January and February 2023, reinforcing the notion some producers there are making steel whether or not their order books dictate it.