China's steel exports fell in July for the first time in five months as the removal of export rebates coincided with weaker demand.

Finished steel exports totaled 4.55 million tonnes last month, down 19 percent from June but still 151 percent higher than in the same month last year, according to preliminary China Customs figures.

The government stripped a 9-percent export tax rebate from hot-rolled steel coil, steel sections and hot- and cold-rolled steel strip, which generally account for about 45 percent of steel export volumes, effective July 15.

"Chinese exports of finished steel surged past 5 million tonnes in June because mills rushed to export material before tax rebates were tightened in July, so it is quite natural to see a decline now," a Shanghai exporter said.

"Export bookings were also hit by weak demand in a slow season," a trader in Jiangsu province said. "Although Chinese steel prices bottomed out in mid-July, most overseas buyers remained cautious at that time."

Exports are expected to slide again in August along with seasonal low demand and the impact of higher export costs, market participants said.

"There have been fewer bookings for August shipments and there is a strong likelihood that export tonnages in August will see a further decrease," a second Shanghai trader said.

Exporters also said the surge in Chinese export offers have hindered business because overseas buyers dare not take cargoes at the higher prices, citing weaker sentiment in domestic markets.

Meanwhile, China's imports of finished steel products fell to 1.4 million tonnes in July, down 4.8 percent from the previous month and 19.5 percent from a year earlier, putting net exports at around 3.15 million tonnes last month, down 24 percent from 4.15 million tonnes in June.

• [Editor:editor]