Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

China’s steel products exports decreased 16pc in H1 2020 (Jan-June) to 28.70mn mt, while imports rose by 98.8pc to 7.34mn mt, according to official customs data. Robust demand in the domestic market post the COVID-19 pandemic supported imports, however, a slump in demand in importing countries struggling with the pandemic, reduced exports. 


In H1, China’s total crude steel production rose to 502.55mn mt. Hebei province led by country’s steel production, topped by producing 122.44mn mt of crude steel, followed by Jiangsu and Shandong province with 56.24mn mt and 38.83mn mt production, respectively. 


In June, China’s crude steel production grew by 4.6pc from a year ago to 91.58mn mt, steel products output grew by 8.2pc in June from a year ago to 115.85mn mt driven by strong domestic demand and higher prices.  


China’s steel trade in June
Units: mn mtJun-20May-20H1 2020H1 change Y-o-Y
Crude steel production91.5892.2749901.11.4%


Ferrous scrap demand

China’s domestic steel prices rose in June. China’s steel composite price index recovered to 102.69 points as of June-end, up by 1.7pc from May-end, according to China Iron and Steel Association (CISA). However, post the flooding in several parts of China, steel demand has gradually cooled-off, learnt Davis Index. Flooding and production cuts adopted by China’s export-oriented industries has tightened domestic scrap supplies in Southwest China. A decline in production of automobile, two-wheeler and home appliances has reduced industrial scrap generation. This situation is expected to continue into H2, 2020.    


Slow demand has prompted steelmakers to cut prices to stimulate sales. Nanjing Iron & Steel Monday revised rebar (HRB400, 16-25mm) to CNY3725/mt ex-works Nanjing inclusive of taxes. Last week, Shagang Steel had raised bids for domestic #2 HMS (6-10mm thickness) by CNY30/mt to CNY2,750/mt del Jiangsu mill, inclusive of 13pc VAT. The weekly Davis Index for domestic HMS 1&2 (80:20) rose by CNY50/mt, inclusive of taxes on July 21. 


Also, China’s iron ore imports rose by 9.6pc in H1 to 546.91mn mt from the prior year half. The average price of imported fine iron ore (62%) was $100.77/mt, up by 10.0pc or $9.2/mt from May. 




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