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Steel export is expected to shrink by 10% - 15%
Click:2335 Date:2020-5-21 10:59:19

    In 2020, the new crown epidemic continues to spread all over the world, which will undoubtedly have an impact on China's steel export and further affect the steel demand. 

Based on the diameter of crude steel, in 2019, China's net export of crude steel is 52.29 million tons, accounting for 5.2% of the annual output. From the perspective of large export categories, China's steel exports are mainly plates. According to the data of the General Administration of customs, in 2019, 38.48 million tons of plates were exported in China, accounting for 60% of steel exports. In addition, bar accounts for 15%, pipe 14% and angle profile 5%. The export of plate is divided into three parts: coated plate (32%), medium thick and wide steel strip (23%), coated plate (17%) and medium plate (14%). In terms of regional distribution, China's steel exports mainly flow to Southeast Asia and Africa, a large proportion to South Korea, while Europe, America and Oceania account for only 10%.

Compared with the output and export data in 2019, the export volume of coarse steel accounts for about 7% of the total output. The export volume of the largest plate, its export accounted for 10.9%. Among them, as a kind of plate, hot rolled coil accounts for about 3.8% of the total exports, while screw steel accounts for only 2.1% of the total exports. Obviously, the impact of overseas epidemic fermentation on the demand of hot coil, cold coil and other plates is significantly greater than that of rebar and other construction steels.

Although the proportion of direct steel export is not large, and the proportion of export flow to Europe and the United States and other regions with rapid epidemic development is relatively small, we need to consider the indirect steel export volume corresponding to the export volume of steel products.

By combing the data of the General Administration of customs, steel products can be classified into four categories: mechanical equipment, home appliances, automobiles, ships and containers, and their respective exports in 2019 can be concluded. After that, combined with the comprehensive consideration of domestic production and market scale of four types of commodities in 2019, the export proportion of these four types of steel products can be calculated respectively. Among them, the export proportion of ship and container industry is very large, accounting for 94.5%. The subsequent new orders are bound to be impacted by the overseas epidemic, but the response may lag behind. In addition, the proportion of home appliances exports is not small, and nearly 40% of the export demand may be impacted. Relatively speaking, the export proportion of automobile industry is relatively small, only about 5%; the export proportion of mechanical equipment is about 13%, which is not high. If it is subdivided into construction machinery, the export proportion will slightly increase to 16%.

After obtaining the export proportion of four categories of steel products, and then according to the weighted average of the weight of these four categories of steel products in the total steel consumption, it can be estimated that the indirect export proportion of steel products is about 19.3%. This proportion is obviously higher than that of direct steel export. In addition, compared with steel exports, the export objects of steel products in China are more scattered, and the proportion of steel products flowing to Europe, America and other places has also increased. For example, the proportion of rolling bearing exported to Europe and America in 2019 is close to 30%. It can be seen that the overseas epidemic situation in Europe and the United States has intensified, and the impact on the indirect export of steel products deserves more vigilance.

After estimating the indirect export proportion of steel products, combined with the direct export proportion, the comprehensive proportion of China's steel export / output is further evaluated. Steel products account for 36.5% of the downstream consumption of the whole steel industry, most of which still flow to the domestic construction industry. Considering 6.9% of the direct export proportion of steel, it can be estimated that the comprehensive export proportion of the whole steel industry is about 13.9% by weight.

According to the impact time of two or three quarters and the 20% decline of production, the impact of continuous fermentation of overseas epidemic on the export of China's steel industry (including direct export and indirect export) is estimated to be 10% - 15%. Combined with the data that the comprehensive export volume of steel accounts for about 13.9% of the total output, the impact on China's total steel demand is expected to be 1.3% - 2.1%, which means that the construction industry needs to achieve an additional 3.6% growth to fully hedge the negative impact of exports. Therefore, although hot rolled coil and other plates have fallen to the cost line, the price trend of plates is still not optimistic in the medium and long term。


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