FOCUS: China's steel exporters grappling with defaults abroad

Defaults among overseas buyers have become a problem for Chinese steel exporters in recent weeks, with falling prices and weakening demand triggered by the Covid-19 pandemic leading to an increase in export credit insurance claims.

When contacted by Fastmarkets two weeks' ago, a source at a steel mill in northern China said he was having to deal with a shipment of 5,000 tonnes of hot-dipped galvanized coil that had been cancelled by a South American buyer that had booked it earlier in the year.
This week, a source at a mill in eastern China said it had encountered similar problems involving 10,000 tonnes of steel products, "with buyers using excuses of lockdowns or breakdown in cashflows."
And a source at a second eastern China-based mill said a report by his company shows a 56.9% year-on-year increase in March in export credit insurance claims, most of which were related to the pandemic. Export credit insurance covers the risk of non-payment by foreign buyers.

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