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Engineering Industry Reports and Surveys
News Release from: MEPS (International)
Edited by the Engineeringtalk Editorial
Team on 04 February 2005
China's exports of stainless steel are
soaring
China is surging ahead in stainless steel production, according to MEPS Stainless Steel Review.
It had been widely forecast that China would one day become a significant exporter of stainless steel The country is fulfilling these predictions more quickly than expected
This article was originally published on Engineeringtalk on 4 Nov 2005 at 8.00am (UK)
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Preliminary trade figures for 2004 show that it is already a substantial force in the international market.
China's total exports of stainless steel last year soared to 387,308 tonnes - more than double the 2003 figure of 154,902 tonnes.
About half of these stainless exports were flat rolled products.
They exceeded 190,000 tonnes in 2004, a near-sevenfold jump on the previous year's figure of 27,813 tonnes.
China's stainless producers also exported about 90,000 tonnes of non-flat products and more than 100,000 tonnes of tubes and pipes.
In flat products, the biggest year-on-year increase in exports was in cold rolled strip which went up from 11,123 tonnes in 2003 to 104,463 tonnes in 2004.
This was a jump of 840% year-on-year, and further growth is expected this year.
Europe is among the markets being targeted.
Several factors lie behind the sharp increase in Chinese cold rolled exports.
First, is the over-capacity for stainless cold rolled strip that now exists in China.
In addition to the major producers Taiyuan and Baosteel and the joint ventures involving Posco and ThyssenKrupp, there are dozens of small private sector cold strip mills operating in this segment.
According to one informed estimate, national capacity for cold rolled stainless now exceeds 2 million tonnes per year and rising.
Secondly, increased exports of cold rolled strip would not be possible without an expanded supply of hot band.
While China's domestic production of this product is growing, much of the extra supply is coming from imports which rose to about 1.7 million tonnes last year.
In order for China to be a substantial exporter of cold rolled products, it must be able to obtain this hot band at competitive prices.
It is clear that there is plenty of coil available on the international market - whether from Asian, European or other mills - to meet China's needs.
Global oversupply of hot band is resulting in the surplus being offloaded in China, but at what price?.
If the Chinese re-rollers can buy hot band from Europe, convert it to cold rolled coil and sell it back to Europe and still making a margin, they must be paying a substantially discounted price for the feed material.
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