Steel export situation will improve

In 2020, the epidemic has led to a severe contraction of the world economy, coupled with increasingly serious trade protectionism, my country's steel exports are facing a severe situation, and the export volume has dropped significantly. In 2020, my country exported 53.67 million tons of steel products, a year-on-year decrease of 16.5%; cumulative imports of steel products totaled 20.23 million tons, a year-on-year increase of 64.4%. However, starting from the second half of 2020, my country's steel export situation has continued to improve, and the decline in export volume has narrowed month by month.

Steel traders said that although the new crown pneumonia vaccine is expected to be vaccinated globally this year, the uncertain impact of the epidemic on the global economy is still unknown. In order to accelerate the recovery of the global economy, European and American countries will implement larger-scale fiscal stimulus policies this year. This is conducive to the recovery of global demand and the improvement of our foreign demand environment. Based on this, it is expected that my country's steel export situation will continue to improve in 2021.

In 2020, my country's exports of goods will remain strong overall. According to statistics, the total export value of my country's mechanical and electrical products reached 10.66 trillion yuan in 2020, an increase of 6% year-on-year, accounting for 59.4% of my country's total export value of goods. Among them, the total export value of notebook computers, household appliances, medical instruments and equipment increased by 20.4%, 24.2%, and 41.5% respectively. Steel traders said that the current production of electromechanical products in European and American countries is still affected by the epidemic, which has promoted the continuous improvement of my country's electromechanical product export situation, stimulated the acceleration of my country's electromechanical products export, and promoted the export of my country's related steel products and the increase in steel demand.

Steel traders predict that my country’s steel exports in 2021 are expected to exceed 60 million tons, a year-on-year increase of more than 10%. If the global epidemic in 2021 can be effectively controlled, my country's steel exports are expected to return to 65-70 million tons. At the same time, the export price of steel products will also have a substantial increase.

Cost pressure is still high

In 2020, the market for raw materials and fuels such as iron ore, scrap steel, and coke will be "rising", and the prices of raw materials and fuels will remain high. The price of iron ore rose from US$93.2/ton in early January 2020 to US$176.9/ton in December 2020. The prices of coking coal and coke also rose strongly. The price of coke will achieve a "ten consecutive increase" in 2020, with a cumulative increase of 450 yuan/ton to 500 yuan/ton, and it is still in the upward path after entering 2021. The price of scrap steel once broke through a new high in the past 7 years.

The Spring Festival has just passed, and the national steel market continues to heat up and a new round of rising prices has begun. The prices of iron ore, steel billets, and finished products have all reached recent highs. As the prices of raw materials and fuels have risen sharply, the production costs of steel mills have continued to rise, and the benefits of enterprises have continued to shrink. Supported by rigid costs, steel mills have raised the ex-factory prices of steel to ease cost pressures.

Steel traders predict that the price of raw materials and fuels will hardly fall sharply in 2021. However, some people in the industry believe that in 2021, the iron ore supply pattern will shift from tight balance to loose, and prices will show a "high in the front and low in the back" situation. In any case, the cost pressure of steel mills in 2021 is still relatively high.