Steel imports decline as exports rise, report says

China exported 67.1 percent more steel to take advantage of soaring prices.
SHANGHAI, China (AP) -- China's steel imports declined over the first nine months of the year in reaction to higher international prices, while exports soared, state media reported Friday.
China imported 23.9 million tons of steel from January to September, down 15.2 percent from the same period a year earlier, the state-run newspaper China Daily reported, citing the China Iron and Steel Association.
Full-year imports are expected to reach 30 million tons, down from 37.2 million tons in 2003, it said.
Exports soar
Meanwhile, China's steel exports soared 67.1 percent over a year earlier to 8.63 million tons in the first nine months of this year. Exports for the entire year are forecast to be as high as 11 million tons, up from 7 million tons in 2003, the report said.
International steel prices are about 30 percent higher than prices in China's domestic market and that, rather than a decline in demand, accounts for the drop in imports, the report cited Luo Bingsheng, vice president of the Iron and Steel Association, as saying.
China has traditionally imported high-quality steel to make up for the lower quality products made by domestic steelmakers.
The report said China was expected to remain a net steel importer over the next few years, though it would increasingly meet demand through domestic production.
Steel output hit 192 million tons in the first three quarters of the year, up 21.6 percent from the same period a year earlier. Demand jumped 16.2 percent on-year to 229.2 million tons from January to September, the report said.
Investment
The government has sought to curb soaring investment in steel factories, one of several industries it says are overheated and facing financial troubles. Small steel plants have been shut down as the industry is consolidated into major industrial groups such as Shanghai Baosteel Group Corp., China's biggest steelmaker.
Meanwhile, Chinese steelmakers are facing shortages of iron ore, coking coal, power and transport capacity, the report noted.
But with prices soaring, steelmakers are seeing sharp growth in profits.
The profits of China's 65 largest steel companies, which account for 90 percent of all steel output, surged 64 percent over a year earlier to 56.7 billion yuan ($6.9 billion) in the first nine months of the year.
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