Chinese steel exports tumbled to a three-year low in February, customs data showed on Wednesday, lower than expectations, as steelmakers in the world's top producer shifted to meeting rising demand at home.

Shipments for the month were 5.75 million tonnes, the lowest since February 2014, data from the General Administration of Customs showed. It was down 29.1 percent from a year ago and down 22.5 percent from January.

"We understand that strong prices in the domestic market has lured mills to reduce shipment overseas but we didn't expect they would cut exports so much. If the big decline continues, upside room for domestic prices might be capped," said Zhao Chaoyue, an analyst with Merchant Futures in Shenzhen.

The sharp drop in exports could blunt criticism by steelmakers in the United States and other global producers that China is dumping excess material abroad.

A rally in steel prices has prompted Chinese steelmakers to raise production. Rebar futures on the Shanghai Futures Exchange have risen 18.5 percent this year.

A senior trader in Hangzhou expected Chinese steel exports to stay at similar levels to February during March given overseas buyers are reluctant to accept rising offers from Chinese exporters.

Total exports for the first two months, which smoothes out the impact of the Lunar New Year holiday falling at different times, fell 25.7 percent to 13.17 million tonnes, data showed.

Imports of steel rose from a year ago to 1.09 million tonnes in February, up 17 percent. Total imports for the first two months of 2017 jumped 17.6 percent from a year ago to 2.18 million tonnes.

China's iron ore imports rose to 83.49 million tonnes in February, up 13 percent from a year ago, as steelmakers increased production and restocked the raw material.Total arrivals for the first two months of the year rose 12.6 percent to 175.3 million tonnes from a year ago.

 

Source:reuters.com

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