Singapore — China's finished steel exports dropped 7.3% year on year to 64.293 million mt in 2019, the lowest annual total since 2014, and an indication of robust steel demand despite higher crude steel capacity.In December 2019, China's steel exports dropped 15.7% year on year to 4.684 million mt, China's customs data released Tuesday showed. On a daily basis, the export volume in December slipped by an average of 0.9% from November. Some steel traders expect exports in January 2020 to be similar to that in December.Finished steel exports in 2020 are unlikely to increase much from last year due to the continued strength in domestic demand, according to S&P Global Platts analysis.China's steel exports boomed in 2015 when overcapacity in the domestic market helped China compete globally. However, due to China's campaign to eliminate overcapacity, which trimmed 150 million mt/year of steel-making capacity and 140 million mt/year of induction furnace capacity over 2016-2018, Chinese steel prices have regained an upward momentum, resulting in the decline in steel exports since 2016.Although China's steel capacity expanded yet again since 2019 through capacity replacements, the robust domestic demand, especially from property construction, has absorbed most of the incremental steel production, leading steel exports to decline in 2019.According to Platts' analysis, China's crude steel capacity will continue to increase by 14 million mt/year in 2020, after it rose by around 42 million mt/year to 1.21 billion mt/year in 2019. As a result, China's crude steel output is expected to rise by 2% year on year in 2020 to around 1,005 million mt. Its crude steel output increased 7% year on year over January-November 2019 to 904.18 million mt.Despite the continued rise in steel production, Chinese domestic demand is expected to remain firm in 2020 due to the government's efforts to stabilize property development and support infrastructure and manufacturing. As a result, the domestic market is likely to remain more attractive than overseas markets.A source at a major Chinese steel mill said his company had planned to reduce their steel export quota further in 2020, as it expects better profits from domestic sales.An export trader said Chinese steel prices were likely to stay high at least in the first half of 2020, as the construction and manufacturing sectors would be supported by China's proactive monetary and fiscal policies. These included trimming the reserve requirement ratio for financial institutions and the early issuance of local government special bonds.However, it remained to be seen whether the strength from the government's stimulus packages could sustain into the second half of 2020, he said.In 2019, China's steel imports decreased by 6.5% year on year to 12.304 million mt, taking net exports to 51.989 million mt, down 7.4% on the year.China's steel imports in December 2019 rebounded by a strong 42.3% month on month and 47.4% year on year to 1.483 million, the highest level since early 2011. This was mainly due to a surge in import orders in October and November, when robust domestic demand and China's ban on scrap imports spurred the import of semi-finished steel products, as well as some finished products.