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China Exports Grew Stupendously in First Half 2007 |
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Thursday, 16 August 2007 |
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China registered phenomenal growth in its steel exports in the first half of this year. The main reason is the macro-economic policy adopted by China resulting in a decline in the domestic steel’s prices.
There has been substantial growth in China’s steel exports in the first half of 2007. In June 2007, the total steel product exports in China amounted to more than 6.28 Million Tons marking nearly a 3% increase from May 2007. This was because traders exported more cargoes before changes in tax rebate intended to limit the energy-intensive sector. The amount of steel exported in June this year was the second highest ever after a record 7.1 Million Tons (nearly) in April 2007.
The first half of this year witnessed a 97.7% year on year increase in China’s exports of steel products at 33.79 Million Tons. On the other hand, China’s imported a total of 8. 69 Million Tons of steel, which was a 7.6% year on year decrease.
However, the market was expected a decline in China’s steel exports following the newly introduced tariff rebate adjustments in the country. But insiders explain the surge as the outcome of the rush among enterprises for maximum exports possible in order to beat the deadline of July 1, 2007 for the implementation of the new policies.
The surging growth was primarily attributed to the solid global demand for steel products as well as the far higher prices in the international market for steel compared to the domestic market. There were additional reasons for the runaway growth in China’s steel exports including the increasing competitiveness of products from domestic steel mills as a result of technical upgradation and the boost in their efforts to strengthen the export market.
The quest continues for Chinese steel makers for increasing exports to international markets owing to the current reduced domestic prices. Many of them have begun transferring the extra cost to the customers.
A research analyst at RNCOS has come to the conclusion that the surge in China’s steel exports dates back to 2004. The skyrocketing steel exports from China have alarmed international market also. China leads the world in steel both in terms of supply and demand. And with government support and a burgeoning economy, China has established itself as a global steel manufacturing hub. According to market conditions, it appears that China will be successful in maintaining its monopoly in steel production for the next five years. |
