[Ferro-Alloys.com] 

  According to the statistics of the General Administration of Customs, P.R.China, in November 2020, China imported 1.854 million tons of steel, which was 76000 tons less than that in October, with a year-on-year growth of 77.9%; from January to November 2020, China imported 18.859 million tons of steel, with a year-on-year growth of 74.3%.

  Industry insiders expressed, "Since the beginning of this year, the price of domestic steel is continuously increasing due to the skyrocketing domestic demand. From the outbreak of coronavirus epidemic at the beginning of the year to the time that epidemic has effectively controlled, domestic economy began to recover in the second quarter, especially from the demand perspective. As can be seen that the real estate industry, infrastructure industry and manufacturing industry are resuming work and striving for a rapid development at the fastest speed. "The divergence of foreign attitudes towards the epidemic situation is relatively large, which leads to the lagging re-start of foreign economy, and the steel price is also at a relatively low level. The domestic steel price is affected by supply and demand, and the price rises rapidly, which is higher than that of foreign steel prices. It is the low price that attracts the peripheral Asian countries, while the high prices drive the inflow of foreign resources." Analysts also said that the price gap between domestic and foreign products and the booming domestic demand were the main reasons for the year-on-year growth of China's steel imports from January to November this year.

  According to statistics, in November, China's steel exports increased by 362000 tons to 4.402 million tons compared with the previous month. In the past 11 months, China exported 48.826 million tons of steel, down 18.1% year on year.

  Analysts believe that the main reason for the month on month growth of China's steel exports in November is the non-stagnation of the development of foreign manufacturing industry. With the improvement of domestic demand in many countries, the growth of new export orders has reached the highest level in two and a half years for three consecutive months. Among them, China, Germany, India, Britain, Brazil and South Korea are the fastest growing countries. Affected by the high domestic steel price and the relatively late start of foreign demand, China's overall steel export decreased significantly in the first 11 months of this year.

  But in terms of price, recently, thanks to the continuous high futures market, the price of domestic steel rose by more than 200 ¥/T per day. Analysts said, "The skyrocketing rise in the price of iron ore (1022, - 20.00, - 1.92%) has raised the production cost of domestic steel and reduced the profit margin of steel plants." Although the price of finished products has been pulled up, iron ore has driven up the price of all raw materials, which has greatly increased production costs and narrowed the steel’s profit margin. This is not conducive to the healthy operation of domestic steel prices, but also causes the outflow of profits. Analysts also pointed out, "Take the hot coil export quotation as an example, on December 21, China's export quotation (FOB 641$/T) still has an advantage over Turkey's (FOB 698$/T), CIS's (FOB 688$/T) and India's (FOB 743$/T)."

  Analysts also said, "Affected by domestic steel price and demand side, China's steel import volume will remain at the current level in the future, with a narrow fluctuation." The import of foreign resources is mainly concentrated on coil, billet and so on. In regard with the impact of rolled plate products, the end price of raw materials promotes the production cost of global steel. Although the domestic steel price is relatively high, it still has a certain competitive advantage compared with the international one. Therefore, if the advantage of price difference is not obvious, it is unlikely that the import volume will increase significantly in the future.

  As far as export is concerned, at present, due to the impact of domestic coil screw, the output of steel mill coil needs to be improved, and there seems to be plenty of more growth ahead. However, the continuous increase of foreign and domestic orders is still better than the coil resource consumption. In addition, the export orders of some steel mills have been arranged until March next year. "It is expected to last until the first quarter of next year, taking into account the time cycle of order production and delivery. Later, with the recovery of foreign epidemic situation, the manufacturing industry will still accelerate its development, and the overall situation will still be conducive to the export of domestic coil board. " Analysts said.

• [Editor:Catherine Ren]