The net export values of steel in July rose by 3% to 3.16 million tons than last quarter.

The export volume of China end steel product had a small decline to 4.44 million tons, increasing 3.5% from the previous quarter and decreasing 2.4% year on year. The import volume of that was 1.24 million tons, increasing 3.3% from the previous quarter and declining 11.4% year on year. The net export volume in this month had a modest rise to 3.16 million tons and the total volumes from January to July were 19.20 million tons, increasing 6% year on year. We thought this appearance supported our views: there was no need to worry about the large influxes to overseas of china steel. Just 52% of total export steel in the first half year was into Asia’s countries and regions but the exports to American and Europe only accounted 3% and 11%, respectively.

Domestic steel production firstly declined in July

At the same time, the production of China crude steel in July was 59.30 million tons, the lowest level from March. This figure shown the daily crude steel was 1.91 million tons, indicating the yearly production 0.697 billion tons. We think there are two reasons for this case. First, the crude steel production for previous months was peak. Second the influence of season factor is not obvious in summer. The total crude steel production from January to July rose by 10.3% to 0.4104 billion tons. Our expectation of 0.686 billion tons for all year production may face risks.

The import of iron stone rose 7% and domestic production declined 6%

The imports of iron stone in July were 546 billion tons and the rises over previous quarter and the earlier year were both 7%. The average import price was $ 173 each ton, the highest figure in history. In addition, domestic iron stone production was 0.117 billion tons, declining 6% than the earlier month, for the reason that daily production declined from 4.1 million tons in Jun to 3.8 million tons. We think that means a limited surging space for domestic iron stone production.