From Macquarie:
As if the global steel industry didn’t have enough problems, Chinese steel exports hitting almost 125mt on a crude steel equivalent basis over 2015 was a distinct surprise on the upside. The weakness in domestic demand was certainly a part of this, as material was diverted towards other demand centres. With a global steel market that was already oversupplied, this amplified the market share battle.
China’s aggressive export ramp from mid-2014 is not a coincidence – this is the period when Chinese domestic steel demand started to trend lower. With production adjustment lagging demand, and strong price arbitrages in place, the natural consequence was a further bleed of Chinese production into global markets, and rather than being discouraged by the government as had been the case in the past, the “walk out into the world” comments highlighted that exports were even being supported.
