China's steel exports fell for the third straight month in October as demand rose at home, offering a bit of relief to the world's glut.
Steel exports in October were down 15% from the same time a year earlier, at 7.7 million tons, according to Chinese trade data released Tuesday. That followed a 22% drop in exports in September and a 7.4% reduction in August.
However, a surge in steel exports earlier in the year means that in total, China has shipped out slightly more of the metal from January through October, with exports up 0.7% year over year at 92.74 million tons.
China accounts for about half the total production of steel world-wide, meaning any changes in the behavior of its steel sector can have outsize impact.
Some analysts said they don't expect Chinese domestic demand for steel to continue as strongly.
Steel inventories are low and need to be replenished. Meanwhile, China has seen a boom in property prices this year, encouraged by government stimulus measures for infrastructure. The housing sector accounts for about 15% of the country's steel demand. Home prices in some Chinese cities have roughly doubled since January 2015.
However, the construction boom isn't expected to last. Some of China's policy makers have expressed concern about a possible market bubble, and about 20 cities are tightening up on housing loans and sales to check speculative buyers.
"Domestic demand is high," Laura Zhai, director of Asia-Pacific Corporates at Fitch Ratings, said of the latest export data. "It does not mean that they are actively reducing exports" at a time when the leaders of the world's top economies agreed last summer that oversupply is serious and needs to be addressed.
China's exports of steel this year are likely to end flat year over year at more than 100 million metric tons, she added.
In addition to slapping tariffs on Chinese steel, U.S. steelmakers and others have brought numerous complaints to the World Trade Organization (WTO) in recent years.
"I don't think the WTO (World Trade Organization) dumping cases have had any real impact," said Daniel Hynes, an analyst with ANZ Bank, who also tied the drop in exports to increasing domestic demand.
Imports of iron ore, the main steelmaking material, were up 7% in October, while they were up 8.9% between January and October, signaling strong steel production.
If that coincides with a drop in domestic demand, the world can expect to see more Chinese steel coming into the market.