China's steel exports are poised to hit an eight-year high in 2024, potentially exacerbating global trade tensions with a flood of low-cost supply.
Exports from China, the world's largest steel producer, are projected to exceed 100 million tonnes this year, the highest level since 2016, according to Shanghai-based consultancy MySteel, News.Az reports citing foreign media.“Steel exports have been at historic highs so far this year,” said Vivian Yang, head of editorial at MySteel. She forecast that total steel exports would be 100-101 million tonnes for the year as a whole, the third-highest ever.
A fall in domestic demand in China, which accounts for more than 50 per cent of global steel production, has led producers to export more material, mostly to countries in South-East Asia and increasingly to Europe.
“China has been flooding the world with steel and pushing prices down,” said Ian Roper, commodity strategist at Astris Advisory Japan, a consultancy.
Mr Roper expected countries to retaliate in a bid to protect their domestic steelmakers from competition from the world’s biggest producer. “More and more trade cases” would be filed against China in the coming months, he said.
The cases could result in countries imposing steeper tariffs on Chinese steel, which faces duties in several nations.
A growing cohort of emerging market economies such as Mexico and Brazil have already raised tariffs this year, while others such as Vietnam and Turkey have launched new investigations.
The US tripled its tariffs on Chinese steel this year, while in May the EU launched an anti-dumping investigation into Chinese tin-coated steel products. Canada announced new tariffs on steel last week.
On Thursday, the China Iron and Steel Association, which represents the country’s big state-owned mills, urged steelmakers to end their “vicious competition” and accused them of “relying on ‘price wars’ to grab market share”.
The association’s China steel price index fell to a near eight-year low as of August 16. In Europe, spot prices for hot-rolled coil have fallen by nearly a fifth since the start of the year.
A slowdown in Chinese construction and economic activity has caused domestic demand to plummet, while steelmakers have been slow to curb their production, resulting in oversupply.
In a signal of Beijing’s concern over the issue, the Ministry of Industry and Information Technology in August suspended approvals for new steel plants.
