China's steel exports in June accelerated from May, as mills shifted more supplies to higher-priced overseas markets even as the government rolled back export tax rebates.

June steel exports rose by 22.5pc compared with May to 6.46mn t and increased by 74.6pc from a year earlier, according to Chinese customs data. January-June exports rose by 30.2pc from the previous year to 37.38mn t.

Most June steel export shipments were spot orders taken in April and early May with Beijing cancelling export rebates for the 13pc value-added tax from 1 May. Chinese mills started adding the tax costs into export offers in March and April, although Chinese steel prices remained competitive enough compared with other major origins to keep export trade active.

The Argus Shanghai hot-rolled coil (HRC) index increased by 25pc or 1,350 yuan/t ($209/t) to Yn6,750/t ex-warehouse from 1 April to 12 May, the highest level since the assessment started in June 2016. Export prices outpaced those gains with the Argus fob Tianjin HRC index rising by 35pc or $268/t to $1,031/t fob during the same period. But prices from other major supplying countries rose even higher on tighter supplies. The Argus fob Black Sea HRC index rose by 27pc or $235/t to $1,100/t fob from 1 April to 18 May.

China steel prices started to retreat quickly in the second half of May after Beijing began a push for price stability. But global steel prices held firm with ex-works HRC prices in northwest Europe and the US midwest assessed at equivalents of $1,365/t and $1,968/t on 6 July, putting the $879/t fob Tianjin HRC index at discounts of $486/t and $1,089/t respectively to these assessments. Overseas buyers' appetite for Chinese steel remains strong despite expectations from mid-May that Beijing would add more taxes to exports as a way to shore up domestic supplies and limit crude steel output.

"Steel exports this year are likely to exceed 60mn t as Chinese prices have been competitive over other countries and mills' export orders have been satisfactory," a north China exporter said.

China's June steel imports fell by 33.5pc from the previous year to 1.25mn t but rose by 3.2pc from May. China imported 7.35mn t steel during January-June, up by 0.1pc on a year earlier.

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