Chinese steel keeps flooding global market, pushing down prices

 China's steel exports are soaring as Chinese steelmakers unload excess products on the international market amid sluggish domestic demand, prompting some countries to consider anti-dumping probes.

China exported 53 million tonnes of steel in the first six months of this year, up 24% on the year, with the total for the calendar year likely to approach the record high of 110 million tonnes set in 2015.

The increase in inventory was more significant at steelmakers than at distributors. They had been at roughly the same level until around 2020, but manufacturers now have about 4 million tonnes more in inventory. Companies are turning to exports as inventory pile up amid weak demand at home.

According to major steel companies, prices on hot-rolled steel coils in the Southeast Asian market have plummeted from around $700 to $900 per tonne, including freight, in 2021 to mid-2022, to a range of around $510 to $520 due to increased exports from China.

Near-term settlement prices for hot-rolled steel coil futures on the Chicago Mercantile Exchange have also fallen sharply from over $1,000 at the end of last year to around $660.

Major Japanese steelmakers' exports are being hit by the downtrend as well. Nippon Steel said at an earnings briefing in May that price declines in overseas markets, due mainly to the influx of Chinese products, will drag down business profit for fiscal 2024 by 90 billion yen ($573 million) compared to fiscal 2023.