Stainless Steel Exports Boosted in the First Half of 2024
Jul 23, 2024
Looking back at the first half of 2024, domestic stainless steel performance was not satisfactory, but the export market has won a glimmer of opportunity in the fierce overseas market competition. From the export data in the first half of 2024, except for the impact of the Spring Festival holiday in February, other months were at a high level, and the export volume in May even set a new high since July 2022. From January to May 2024, the cumulative export volume of domestic stainless steel was about 1.912 million tons (second only to the 1.931 million tons in the same period of 2022), an increase of 12.8% year-on-year. Against the backdrop of the impressive performance of stainless steel exports, what factors have contributed to this?
Since 2024, European stainless steel companies such as Outokumpu and Acerinox's Los Barrios plant have been affected by strikes, leading to a decrease in stainless steel production. The data released in the first quarter of 2024 showed a decrease of 1.3% and 6% respectively compared to the fourth quarter of 2023. After a 136-day strike, the production activities of the Los Barrios plant were almost paralyzed, and the plant had changed from five shifts to three shifts, with a significant drop in supply. It is reported that in late June, the workers of the plant finally accepted the proposed collective agreement, and Acerinox has begun to prepare for the resumption of production. The delivery times of other European steel plants have also been extended, mostly for delivery in August and September, and many distributors' inventory is lower than demand. In addition, POSCO's stainless steel equipment was inspected in May in South Korea, and the supply of stainless steel in Japan and India also declined. With the decline in supply from overseas stainless steel companies and prices on the rise, while China's stainless steel production remains high and prices are relatively weak, the demand for Chinese stainless steel has improved due to the price advantage.
In recent years, the performance of stainless steel exports has been good, partly because the proportion of processing trade has increased, and this volume will also be reflected in future exports, leading to an increase in the number of exports to a certain extent. According to statistics, the year-on-year increase in processing trade in 2021 was about 338,300 tons, accounting for 30.1% of the year-on-year increase in imports, which was at a high level since 2018. Since 2024, the import volume of stainless steel has increased year-on-year, and the proportion of the increase in processing trade has also risen to 29.8%. This volume, after being processed domestically, will also be reflected in subsequent exports.
Since 2024, the economy in Southeast Asia has been steadily recovering, and construction and infrastructure projects continue to expand, increasing the demand for stainless steel. Since March 2024, the volume of stainless steel exported from China to Southeast Asia has been growing rapidly. In May 2024, the volume of stainless steel exported to Southeast Asia was about 119,400 tons (a new high), an increase of 19.7% month-on-month and 85.5% year-on-year. From January to May, the cumulative volume of stainless steel exported to Southeast Asia was about 415,800 tons, an increase of 114,300 tons year-on-year, an increase of 37.9%. Among them, the increase in stainless steel exports to Vietnam was the most obvious, with a volume of about 44,000 tons in May, an increase of 4% month-on-month and 81.5% year-on-year. The cumulative volume increased by 44% from January to May.
Since 2024, the volume of stainless steel exported from China to Turkey has been gradually increasing. In May, the volume reached 52,000 tons, a historical high, an increase of 38.9% month-on-month and 133.3% year-on-year. The increase is mainly reflected in the volume of cold-rolled stainless steel. In May, about 37,000 tons of cold-rolled stainless steel were exported from China to Turkey, an increase of 29.9% month-on-month and 120.5% year-on-year. As a result, POSCO Assan TST in Turkey proposed to impose a 20% anti-dumping tariff on stainless steel from China and Indonesia. According to customs data, the increase in this cold-rolled volume is mainly due to the increase in the volume of processing and re-export. The following two charts also show a high degree of consistency. In March and May 2024, the volume of cold-rolled stainless steel processed and re-exported from China to Turkey was about 14,000 tons, accounting for about 40% of the cold-rolled volume exported to Turkey.
Overall, due to the oversupply of stainless steel in mainland China and the lack of improvement in market demand, some stainless steel companies have turned their attention to exports, where prices have a competitive advantage in the overseas market. Moreover, under the influence of the EU's anti-circumvention investigation on cold-rolled stainless steel from Turkey and Vietnam, the performance of China's stainless steel exports has been good. It is reported that the markets in Southeast Asia and the Middle East are also very active. As the consumption off-season approaches, the orders for stainless steel exports are gradually weakening. Recently, the news of "Indonesia's Yongwang suspension of production in June, or for 2 months" has caused a stir again. Can the export of cold-rolled coil plates, which accounts for 48% of China's stainless steel exports, continue to usher in opportunities?
( Source: Mysteel )
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