Singapore — China’s finished steel exports are expected to rebound modestly in March and April after tumbling over January-February, but are unlikely to return to the levels seen in the same period last year, traders said Tuesday.

The country’s finished steel exports over January-February fell 27% year on year to 7.811 million mt, the lowest combined total for the two-month period since 2013, China’s customs data released Saturday showed.

The country’s steel imports over rose 2.1% over the same period to 2.041 million mt.

As a result, China’s net steel exports over January-February were down 33.7% on year at 5.77 million mt.

The sharp fall was attributed to a plunge in overseas orders placed in November and December, when strong domestic demand pushed up Chinese steel prices and encouraged Chinese mills to focus on the home market.

Some market sources expected steel exports in March and April to improve noticeably from the level seen in February, when China was still largely in lockdown due to the coronavirus. Mills have stepped up efforts to export more in March and April in a bid to ease supply pressure in the domestic market, where inventories have been soaring, market sources said. The recovery in domestic steel demand has remained slow in March after being almost frozen by the coronovirus outbreak in February, they said.

However, market sources did not expect exports in March or April to rebound to anywhere near 6 million mt/month; China exported 6.327 million mt in March 2019 and 6.326 million mt the following month.

Moreover, some exporters said the anticipated improvement in exports was unlikely to be sustained, partly because Japan and South Korea have recently lowered their export prices to competitive levels in the Asian market as the coronavirus outbreak dents their domestic demand as well. Chinese mills are also reluctant to boost exports for May shipments, anticipating that domestic demand could return to normal levels and even outpace demand in other Asian markets by mid-year.

Sources said China was likely to make extra efforts to boost its infrastructure sector in 2020 to offset the impact of the coronavirus on the economy, which could result in the domestic market becoming one of the strongest globally markets in months to come.