Record Chinese steel exports risk global trade war
With mainland exports on pace to exceed a record 80 million tonnes, overseas rivals are complaining of cheap metal eating into their sales
Record steel exports from China are undercutting foreign rivals on price, triggering complaints from South Korea to South Africa that may signal the start of a trade conflict.
China produces about half the world's steel and exports are on pace to exceed 80 million tonnes this year, the most ever, according to the China Iron & Steel Association. That is exacerbating trade tensions in the region.
With China's economy slowing to levels not seen for more than two decades, producers are boosting shipments to other markets.
"It's certain the trend to export will continue next year," said Luo Yongdong, the head of imports and exports at Panzhihua Iron & Steel (Group), a unit of Anshan Iron & Steel Group, one of China's largest steelmakers. "As a result, trade disputes will intensify."
Hebei Iron & Steel Group's Tangshan unit said this week it would make its first shipments of auto sheet to Latin America, while its Xuancheng unit shipped hard steel wire to Japan on November 7 for the first time.
In Japan, Tokyo Steel Manufacturing managing director Kiyoshi Imamura said the sheer scale of China's exports put it on pace to reach 100 million tonnes a year. That is about equal to the entire output of Japan, the world's second-largest producer.
Japan's Kobe Steel and South Korea's Posco said they had complained to counterparts in China about the flood of metal that was eating into their sales. Chinese steel is also piling up in ports in India and Africa, where domestic producers have asked governments to do something to stop it.