Chinese imports to Latin America dip 32%

Between January and June 2016 China shipped 3.4Mt of steel to Latin America of which 3Mt was finished steel and 387kt steel-derivative products. This figure is down 32% when compared with the same period last year (2015).

During the period, Central America was the main destination for Chinese steel (878kt) followed by Chile (536kt) and Peru (451kt).

In value terms, the volume of steel sent to Latin America was worth US$1.5 billion, which is equivalent to US$453/tonne, 2% higher than the rest of the world. However, Chinese steel shipped to the rest of the world (excluding Latin America) was worth US$28.2 billion – an average price of US$443/ton.

According to the Latin American Steel Association (alacero) several destinations in the region are facing import prices significantly lower than those in the rest of the world (r-o-w). In Central America, the average price was 16% below the

r-o-w average at US$368/ton. In Peru it was 9% lower at US$404/ton, in Dominican Republic 6% lower at 413/ton and in Ecuador 6% blow at US$417.6%.

During the first half of the year, the average price of Chinese steel exports to Latin America weakened by 31% when compared with Q1 2014, while those applied to the r-o-w weakened by 38%. Volumes shipped by China to Latin America were 23% lower but for the r-o-w they increased 73%.

Flat products represented 45% of Chinese exports to Latin America at 1.5Mt (down 42% when compared with January to June 2015).

The region’s largest importers of flat steel from Chinese are Chile, Central America and Brazil, with Chile’s prices, on average, 9% lower than the r-o-w.

The most significant imports between January and June 2016 were hot dip galvanised sheet (421kt) and other alloyed steel sheets and coils (364kt). Export volumes of these products showed a 27% and 65% drop respectively when compared with last year.

Between January and June 2016 long products exports from China to Latin America reached 1.3Mt (or 39% of total steel received by the region). Central America is the largest importer of Chinese long steel (505kt) and registered an average price of US$302/ton, 6% lower than the r-o-w and 22% lower than H1 2015 when it was US$385/ton).

Steel bars registered the largest import volume over the period (752kt), up 5% on the previous year. Wire rod on the other hand (426kt) was 30% less.

Seamless pipe accounted for 4.7% of total steel (finished and derivative) shipments from China (157kt) representing a 22% year-on-year drop. The average price paid by Latin America was US$783/ton, 25% lower than the r-o-w.

Finally, steel derivatives account for 11% of total Chinese exports to Latin America during H1 2016 (193kt). This is broken up into 149kt seamless pipe and 43kt wire.

Steel derivatives volumes were 21% lower than they were in H1 2015. With Latin America widely regarded as the top destination for Chinese steel-derivatives products, the average price per tonne of US$620 was 23% lower than in the r-o-w and 19% below the level recorded during H1 2015.

Source: Alacero.