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Chinese steel export increase ferments steel war between China and others

We hope that China, the second economy entity in the world, can get rid of its dependence on exports. However, this year is surely a bumper year of export for Chinese steelmakers. Statistics from Customs shows that Chinese steel exported increased 73% YoY to 8.52 million tonnes, recording a new high in history.

In addition to sluggish market demand, the strict environmental regulations and heavy debt burden forced Chinese steelmakers trying to expand export to get rid of dilemma.

However, this trend may cause US and Europe to take measures against it. Recently, US approves antidumping measures againststeel pipe from South Korea and other countries. Europe also proposed with a trade lawsuit about steel trade on mid May.

Although most of Chinese steel products has been exported to Asia market instead of Europe, these trade frictions also will exert chain reaction to steel price and global steel trade.

Mr Kevin Dempsey, senior president of American Iron and Steel Institute said that “US steel sector is facing with import increase from all over the world, which boosted US economy to some extent. China was trying to sell excess steel products to other countries at low price, which as a result will cause chaos in global market. Now, Chinese steel export hit the record in history, but global steel demand stayed far away from the highest level. US economy is relatively strong till now.”

Mr Michael Shillaker, GM of Credit Suisse said “If the price continued falling, US will blame it on China. Since this year, US HRC price dropped 5% YoY; that in Europe declined 13%; that in China decreased 17% YoY.”