Chinese steel exports surge 109% in 2006

Chinese steel exports in calendar year 2006 amounted to 43.01 million tonne, a growth of 109.6 per cent on a y-o-y basis, according to data gathered from foreign brokerage houses and the official Xinhua news agency.

The sharp growth in exports has come despite numerous steps taken by the Chinese government to curtail growth. Meanwhile, Chinese steel imports fell 28.3 per cent y-o-y to 18.5 million tonne in CY06.

Despite rising Chinese steel exports, domestic player Tata Steel's net realisation improved by an estimated 8.4 per cent y-o-y to Rs 36,211 a tonne in the December 2006 quarter, while SAIL's net realisation grew 15.2 per cent y-o-y to Rs 28,456 a tonne. Analysts pointed out to strong domestic demand for improved realisation.

Buoyant steel prices this year compared with depressed prices last year had also helped domestic steel companies to better realisation on a y-o-y basis, they added.

The growth in Chinese exports has come at a time when its steel production rose by 17.7 per cent y-o-y to 418.8 million tonne in CY06, according to the Brussels-based industry body, the International Iron and Steel Institute (IISI). Chinese steel production alone accounted for 33.7 per cent of the total global production during the period.

The Chinese government has, over the last few months, taken several steps to control its steel exports, including imposition of tariffs on exports of stainless steel ingots and preliminary processed tungsten from January 1, 2007.

In addition, the Chinese government has tightened the eligibility requirements for steelmakers to import iron ore from overseas suppliers. I t has also ordered the demolition of outdated steel-smelting ovens of 26 firms in 2007.