China's Steel Import Performance In 2022 And Outlook For 2023

After the sharp increase in billet imports in 2020-2021, China has become the world's second largest steel importer after the United States, followed by Turkey, Thailand, South Korea and several EU countries are also the world's major steel importers. In 2022, China's billet and finished steel imports will drop by 53.5% and 26% year-on-year respectively, with a cumulative import of 16.944 million tons (including semi-finished products). Although compared with exports, China's imports, especially finished products, are relatively small, but it is still one of the largest steel importers in Asia. Except for the special situation in 2020, China's overall steel imports have generally shown a decline in the past 20 years. And hit a nearly 30-year low in 2022.

In the past 10 years, although China's steel exports have experienced ups and downs, its imports have been relatively stable, at around 12-13 million tons per year. In 2020, as China takes the lead in recovering supply and marketing from the downturn of the new crown epidemic, import demand will surge. At that time, China will import more than 18 million tons of steel billets throughout the year, and finished steel will also increase by 64% year-on-year to 20.23 million tons, reaching a peak.

In 2022, China's finished steel imports will reach US$17.09 billion, and the average price of imported steel per ton will be US$993 per ton, which is the lowest level in the past 10 years. In contrast, the average export price in China in 2022 will be US$1,437/ton, which is the seventh consecutive year of year-on-year growth. In 2022, China's finished steel imports will reach US$17.09 billion, and the average price of imported steel per ton will be US$993 per ton, which is the lowest level in the past 10 years. In contrast, the average export price in China in 2022 will be US$1,437/ton, which is the seventh consecutive year of year-on-year growth. In fact, during the period from 2002 to 2020, the average price of finished steel imports exceeded exports by a large margin, indicating that China's share of value-added products exported after 2021 has increased.

The sources of China's steel imports are relatively concentrated. Japan, South Korea, Indonesia, China Taiwan, and Germany have been the five most important sources in the past decade, accounting for more than 80% of the total imports. Japan has always been China's largest source of steel imports. In 2022, China will import 3.827 million tons of steel from Japan, accounting for 36% of total imports. In the past ten years, except for the increase in imports from the Indonesian market, the imports from other countries have declined with the decline in overall imports.

Compared with rods and wires, imported steel products are mainly plates, which is similar to China's exports. In terms of the share of special steel, in 2022, the import volume under the special steel category of the customs data of the United Steel Federation will account for 49% of the total import of finished steel, and this proportion will only be 17% in the export link. Although in absolute terms, China exported 11.487 million tons of special steel and imported 8.59 million tons in 2022, making it a net exporter of special steel, but in terms of proportion, the special steel product is still China's high dependence on foreign countries.

Indonesia is the main source country of China's special steel imports. In 2022, China imported 2.49 million tons of special steel from Indonesia, accounting for nearly 50% of the total import volume, most of which are various types of stainless steel. This value has soared since 2015 and will reach a historical peak in 2022. Followed by Japan, South Korea and Germany.
The import and export classification of Steel Union Special Steel mainly includes: alloy rods, wires, and profiles; stainless steel bars, wires, profiles; cold and hot-rolled stainless steel, oriented silicon steel, and stainless and alloy semi-finished steel.

In 2022, China's finished steel imports will decrease by 25.9% year-on-year, hitting a new low in nearly 30 years. The main reason is that overseas inflation has surged due to the supply and demand and trade flow problems caused by the conflict between Russia and Ukraine. In 2022, the global natural gas and shipping prices once broke record highs. Soaring costs combined with US dollar interest rate hikes lead to a relatively weak RMB, which is not conducive to import activities, resulting in shrinkage of imports of almost all steel mills. In particular, the price of raw materials such as semi-finished products once exceeded that of finished steel in the European market. Although the restrictions on Russian export transactions have created trade opportunities for my country to import steel billets from Russia, especially slabs, due to the decline in overall supply and demand, the import volume of steel billets has dropped by more than 60% year-on-year.

From the perspective of demand, special steel products are mainly used in automobiles, aerospace, machinery and other fields. Among them, the automobile industry accounts for more than 40%. With the rise of labor costs in China, labor-intensive manufacturing industries are moving to regions with relatively low labor costs. The consolidation of Southeast Asia's role as a manufacturing center in recent years may continue to support the demand for such steel products, and increase local import demand.

Looking forward to 2023, China's steel imports may continue the downward trend of the past few years. Especially in the first quarter, China's steel resources are relatively low compared with overseas, and various resources including steel billets have received considerable export orders. However, there is little chance of importing imported materials and billets. It is expected that the year-on-year decline in imports in the first half of the year will continue to expand. In the long run, the situation that China mainly imports special steel may change to support my country's complete self-sufficiency in special steel varieties and reduce dependence on imports.

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