OREANDA-NEWS. February 10, 2015. Shanghai steel futures slipped on Monday after weak Chinese trade data underlined a deepening slowdown in the world's top consumer of the alloy and suggested further poor demand ahead.

China's steel exports surged to a record high of 10.29 million tonnes in January amid the slowing consumption at home, customs data showed on Sunday.

The sustained increase in exports came despite the removal of tax rebates for boron-added steel products from Jan. 1.

Citigroup analyst Ivan Szpakowski said in a note that "many contracts for January exports had likely already been signed prior to the change (in rebates) and mills and traders likely liquidated much of their remaining inventory" last month.

The strong exports also reflect a weaker-than-usual seasonal restocking of steel inventories that typically takes place between mid-December and March.

"This year the restock has been much smaller than normal due to the exit of many traders, deteriorated balance sheets, falling steel prices and weak demand," Szpakowski said.

The most-traded rebar for May delivery on the Shanghai Futures Exchange was down 0.8 percent at 2,468 yuan (\\$395) a tonne by the midday break.

China's overall exports dropped 3.3 percent in January and imports tumbled 19.9 percent, far worse than analysts had expected and highlighting a deepening economic slowdown.

"Given that the 2014 Chinese New Year holiday fell in January, the sharp decline in imports - despite more effective working days - is even more alarming," OCBC Bank said. This year's Chinese New Year holiday falls in February.

China's iron ore imports fell to 78.57 million tonnes last month from a record high of 86.85 million tonnes in December, customs data showed. The drop mirrored the decline in imports of other commodities from crude oil to copper amid swollen domestic inventories.

Iron ore for immediate delivery to China's Tianjin port rose 1.2 percent to \\$61.80 a tonne on Friday, but still posted a loss of more than 6 percent for the week, its biggest since November, according to The Steel Index.

Weaker Chinese steel demand and abundant supply of spot cargoes dragged down iron ore to \\$61.10 on Thursday, its weakest since May 2009.

Iron ore has dropped more than 13 percent so far this year, stretching a 47 percent decline in 2014.