Chinese steel export levels exceeded expectations in June, recording their first year-on-year increase since July 2016. That still left exports over the first half of 2018 down heavily from 2017 however, Kallanish notes.

In June China exported 6.94 million tonnes of finished steel, 2% more than in June 2017 and the highest level since July 2017, according to the General Administration of Customs. That left Chinese exports over January-June down -13.2% y-o-y at 35.43mt.

June exports were also up 0.9% month-on-month. Increasing steel prices and falling domestic inventory levels had suggested June could see a slight decline in volumes, and that is now expected to be seen in the July data.

Volumes are likely to drop at least through July-August, with a possible up-tick in September-October. A dip in prices two weeks ago gave exporters some short lived opportunities to book volumes to spot customers in Southeast Asia. Those opportunities appeared to be closing up again over the last week however.

Firm steel prices in the second half are likely to have a negative impact on export volumes. Over the second half of the year monthly export volumes are expected to average around 5.5m tonnes/month, leaving total exports for the year at around 65-70mt.

China also imported 1.04mt of steel, down -8.3% m-o-m and -8% y-o-y. Over the first half Chinese steel imports were down -1.9% at 6.67mt.