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China's aluminium exports rise, steel down as Trump prepares tariffs
[BEIJING] China's aluminium exports grew more than 25 per cent in the first two months of 2018, but steel exports fell by nearly a third, as the world's top producer of the two metals faces scrutiny amid US plans to impose hefty tariffs later on Thursday.
The rise in aluminium shipments suggested winter production cuts by Beijing to battle air pollution had not been as deep as expected, analysts said, depressing local prices and leaving producers with excess supplies to sell offshore.
In contrast, the fall in steel exports extended a steady decline in recent years as local demand has grown and China reins in its domestic steel capacity to curb stifling smog.
President Donald Trump wants to impose duties of 25 per cent on steel and 10 per cent on aluminium to counter cheap imports, especially from China.
Other data on Thursday showed China's total exports unexpectedly surged at the fastest pace in three years last month, suggesting its economic growth remains resilient even as trade relations with the United States rapidly deteriorate.
In the first two months of 2018, China's exports of unwrought aluminium and products rose 26 per cent to 817,000 tonnes, according to the General Administration of Customs.
"The increase is worth noting because it happened while there has been industrial cuts in China. It suggests the cuts may not have been so effective," said Vivek Dhar, analyst at CBA in Melbourne.
Shipments have risen since November when the cuts were first introduced, creating a favourable arbitrage to the London Metal Exchange price and encouraging producers and fabricators to seek better margins abroad.
The United States accounts for 14 per cent of China's total aluminium exports.
February's exports fell 15 per cent from January, but the data may partly reflect the timing of the week-long Lunar New Year holiday, which was held later this year.
Analysts suggested there might have been a dash to sell into the United States before the imposition of punitive duties on aluminium foil, although foil volumes remained steady in January. February's foil figures will be released later this month.
Washington has slapped anti-dumping duties on a swathe of Chinese steel and aluminium products in recent years, including aluminium extrusions and alloy sheet.
Falling Steel Exports
China's steel product exports over January and February fell 27 per cent to 9.5 million tonnes from a year earlier.
China accounted for only about 2.9 per cent of US steel imports, data compiled by Wood Mackenzie showed. The world's top steel-buying nation, the United States imported a total 35.6 million tonnes last year.
The January and February figures were the lowest monthly totals in four years, reflecting a tigher domestic market as the government ramps up its effort to curb outdated, excess capacity, as well as rising domestic demand.
"As long as China's domestic market remains tight, exports would remain slow," said Daniel Meng, analyst at CLSA in Hong Kong.