In August, China's finished steel exports continued to drop to 2.8 million tons, a drop of 38% (35% year-on-year) and a new month-on-month decline. We believe that this shows that the previous export tax rebate policy has an important driving effect on China's steel exports. At the same time, the imports of finished steel in August were 1.35 million tons, a decrease of 4% month-on-month or a 15% year-on-year decline. In August, net steel exports fell by 55% to 1.4 million tons.
The export price of steel rose to 973 USdollars/ton, setting a new monthly high.
Although exports of steel products fell, export prices rose to US$973/ton, a 10% increase from the previous quarter or an increase of 22% year-on-year, setting a new monthly high. We believe that this part is due to the improvement in product structure, in part because Chinese steel mills have increased export prices in order to compensate for the cancellation of the export tax rebate policy. If this trend continues, it may push up the destination price.
Imports of iron ore hit a record low since January 2009.
The amount of imported iron ore that was once increased in July fell by 13% in August from the previous month, or by 10% year-on-year to 44.6 million tons. The import prices remained basically unchanged and remained at US$140/tonne. The total import of iron ore in the first eight months of 2010 was 405 million tons, which was basically the same as the same period of last year (a year-on-year increase of 0.1%), while the export volume of crude steel increased by 15.3% year-on-year to 426 million tons. We believe that China's implementation of power restriction measures since August may mean that iron ore import prices and imports will be under greater pressure by the end of the year.