China's steel exports rise, sparking global trade tensions
(MENAFN) China’s steel exports are on track to reach their highest levels in eight years by the end of 2024, a development that could exacerbate global trade tensions as low-cost Chinese steel floods international markets. According to Shanghai-based consultancy MySteel, exports from China, the world's largest steel producer, are expected to surpass 100 million tons this year, marking the highest volume since 2016. Vivian Yang, the editor-in-chief of MySteel, noted that China’s steel exports have already reached record highs so far this year, with total exports projected to be between 100 million and 101 million tons, making it the third-highest export level ever recorded. This surge in exports is primarily driven by a decline in domestic demand in China, which accounts for more than half of the world’s steel production. As domestic consumption weakens, Chinese steel producers are increasingly turning to international markets, with Southeast Asia and Europe becoming major destinations for these exports.
The influx of Chinese steel into global markets is driving prices down, prompting concerns about potential trade disputes. Ian Roper, a commodities strategist at Astris Advisory Japan, stated that China is overwhelming the global market with steel, which is exerting downward pressure on prices. Roper anticipates retaliation from several countries as they seek to shield their domestic steel industries from competition posed by China's low-cost steel exports. He predicts that more trade disputes and legal cases against China could emerge in the coming months, potentially resulting in countries imposing even higher tariffs on Chinese steel products. Already, Chinese steel faces significant tariffs in many countries, and this trend is expected to intensify. A number of emerging economies, including Mexico and Brazil, have raised tariffs on Chinese steel this year, while countries like Vietnam and Turkey have initiated new investigations into Chinese steel imports.
The United States has responded by tripling tariffs on Chinese steel imports this year, while the European Union launched an anti-dumping investigation into Chinese tin-coated steel products in May. Canada also recently announced new tariffs on steel imports from China. In response to the growing international backlash, the China Iron and Steel Association, which represents the country’s largest state-owned steelmakers, recently called on its members to cease their aggressive competition tactics, criticizing them for engaging in price wars to capture greater market share. As the situation unfolds, tensions are likely to rise further, with potential implications for global trade and the international steel industry.
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