Metals Sector Update - China Steel Exports Rise Ahead Of Rebate Cuts: Motilal Oswal
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Motilal Oswal Report
China steel exports remained high for the second consecutive month in April 2021 – as exporters looked to avail the benefit of export rebates before the Chinese government discontinues this from May.
Thus, steel exports rose 26% YoY (6% month-on-month) to 7.97 million tonne, the highest since December-16.
As export rebates are no longer available, we expect China exports to decline from May.
This decline expectation should help Indian steel mills get more export orders and tide over the current weakness in domestic steel demand (down ~25% from March).
Moreover, export realisations are currently strong, and export hot rolled coil is at a ~15% premium to India domestic HRC prices.
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