CRU: China Becomes a Net Importer of Hot-rolled Coil

23 February 2018

Chinese imports of stainless steel hot-rolled coil surge as Tsingshan's Indonesian facility continues to ramp up strongly.

Chinese imports of hot-rolled coil jumped by over 140% m/m to an eleven-year high in December, as imports from Indonesia surge following the ramp up of Tsingshan's Sulawesi facility. Subsequently, China became a net importer of hot-rolled coil (HRC) for the first time in seven years, representing a structural change in Asian trade flows as production continues to shift towards lower-cost Indonesian operations.

Shifting trade flows: net exporter to net importer
For the last seven years or so, China has been a net exporter of hot-rolled coil, with their export position generally strengthening with time as both domestic production and global demand grew. Indeed, over the last three years China's net exports averaged well above 100 kt/month. However, with almost 116 kt of hot-rolled coil arriving from Indonesia in December, China became a net importer for the first time in over seven years, with imports exceeding exports by a marginal 1.6 kt.

Tsingshan's Indonesian facility continues to ramp up strongly
China began importing significantly higher volumes of stainless steel slab and hot-rolled coil in August last year following the start-up of Tsingshan Indonesia. It has been clear for some time now, that Tsingshan Group is, first and foremost, targeting the domestic Chinese market for large volume sales of the group's highly competitively Indonesian material. The majority of imports arriving at Chinese ports were initially slab, however, there was a noticeable shift towards imports of hot-rolled coil in December, likely as some minor start-up issues at the recently commissioned hot-rolling line in Indonesia were overcome.

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