China's exports fall amid outcry over supply flood

SEOUL • From steel bosses in the United States to oil refinery officials in Asia, those facing increased competition from Chinese commodity exports may be seeing a glimmer of relief.

China's overseas shipments of steel, aluminium and fuels all dropped in January from a month earlier, data from the nation's Customs administration showed yesterday.

That represents an easing in the deluge of manufactured products from the country, where slowing domestic demand amid economic malaise has sent record volumes abroad and compounded a worldwide surplus of commodities.

The glut has kept returns from raw materials near the lowest level since at least 1991.

The flood has spawned trade tensions, prompting US politicians to criticise cheap steel shipments from China and India. Refiners from South Korea to India say Chinese fuel cargoes are eroding their profit margins.

"As global prices of commodities have generally hit the bottom, China is focusing on stockpiling and reducing its own production, rather than shipping them abroad," said analyst Will Yun at Hyundai Futures. "China's efforts to restructure its steel and aluminium sectors seem to be making some progress."

Steel product exports by China were at 9.74 million tonnes in January, compared with 10.65 million a month earlier, according to yesterday's data.

The relief may be short-lived as the drop in shipments may have been the result of slowing production before the Chinese New Year holidays, when manufacturing activity typically eases, according to Shenhua Futures.

Net fuel exports fell 76 per cent in January from the previous month to 350,000 tonnes, the lowest since June, according to calculations based on General Administration of Customs data. Gross fuel exports dropped 30 per cent, compared with December.

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A version of this article appeared in the print edition of The Straits Times on February 16, 2016, with the headline 'China's exports fall amid outcry over supply flood'. Print Edition | Subscribe