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China trade
Economy

China’s steel export surge prompts concerns it could add to trade tensions

Domestic real estate slump has led Chinese steel producers to seek out overseas markets amid overcapacity crisis

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An employee works at a factory that makes stainless steel products in Qingzhou, Shandong province, on October 13. Photo: AFP
Mia Nurmamatin London
China’s steel exports hit an eight-year high last month as the industry grapples with overcapacity from a property downturn and weak domestic demand, prompting warnings that the surge in exports could intensify trade tensions.

Overseas shipments of steel reached 10.15 million tonnes in September, up by 25.9 per cent year on year to the highest level since June 2016, according to customs data.

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But the price of exported steel fell by 11.62 per cent year on year last month.

In the first eight months of the year, China exported 66.818 million tonnes of steel, up 31.8 per cent year on year, but the value of its steel exports fell by 10.7 per cent.

China produces more than half the world’s steel, and mainly uses it in areas such as construction, infrastructure, machinery and cars.

The construction sector historically accounted for 35 per cent of domestic steel consumption, but the prolonged crisis in China’s real estate sector has led to a slowdown in construction activity.
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As of August, new home starts had declined by 22.5 per cent year on year, prompting steel manufacturers to seek overseas markets for their output.

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