bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

helpersCheckIsPostiesArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

moreOnThisArticles

urlAlias

commentCount

sponsorType

authorLocations

authors

paywallTypes

corrections

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

socialHeadline

headline

flag

firstTopic

glossary

flattenTypeIds

publishedDate

additionalInfoBoxes

images

image

relatedLinks

relatedNewsletters

__typename

createdDate

sponsor

factSheets

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

copyrighted

customTimezone

liveContents

Mia Nulimaimaiti

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.
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.
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.
The demand side also faces pressure, as the housing sector slump reduced the demand for steel
Yan Liang, Willamette University economist
The major overseas destinations for Chinese steel in the first eight months of the year were Vietnam, accounting for 10.25 per cent of exports, South Korea (8.71 per cent), and Indonesia (5.25 per cent).
“I think ultimately, the problems are twofold, one is that the low-end steel has an overcapacity issue but the high-end does not. It is part of a supply-side structural problem,” said Yan Liang, an economist at Willamette University in the US state of Oregon.
China’s annual steel output hit 100 million tonnes in 1996 and surged sevenfold over the next decade. Despite policies to curb output from 2016, rising profits drove production until further capacity cuts were implemented in 2020.
“The demand side also faces pressure, as the housing sector slump reduced the demand for steel,” Liang said, adding that the sector’s export push could increase trade frictions.
China is facing more trade investigations from multiple countries over its steel overcapacity, and this year has already been subjected to 28 such trade investigations from 12 economies, including the European Union, the United States, Brazil, Vietnam and Malaysia, according to the Ministry of Commerce’s China Trade Remedies Information platform.
In the first eight months of last year, there were only two related trade investigations, both initiated by the US, according to the website.
We must address issues like ‘zombie capacity’
China Metallurgical News
Analysts have argued for continued regulation of steel production in line with carbon emission targets, and more mergers and acquisitions, exits, and technological improvements to weed out low-end producers.
As of September 6, 95.7 per cent of 247 sampled steel enterprises in China were operating at a loss, according to steel consultancy Mysteel.
It projected that steel exports would reach 100 million tonnes this year, the highest level in eight years, with the export of overcapacity posing increased risks of trade investigations.
Last week, the China Iron and Steel Association organised a “necessary and timely” meeting to address the domestic overcapacity crisis.
“We must address issues like ‘zombie capacity’ [unviable enterprises sustained by government subsidies] as well as the ineffective removal of outdated production capacity,” the association’s China Metallurgical News reported after the meeting.
Addressing a news conference on Monday, customs spokesman Lu Daliang rejected claims of steel overcapacity, saying that most of the steel produced in China is used domestically.


Deregulation, migrant workers hold key to boosting demand in China: academics

Donald Trump’s China policy could pit deal makers against ideologues: analysts

Asia-Pacific to see slowing economic growth amid trade tensions, policy uncertainty: Apec

Ex-WTO head says China-EU ‘united front’ can counter Trump trade curbs

China trade

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

An employee works at a factory that makes stainless steel products in Qingzhou, Shandong province, on October 13. Photo: AFP

China’s export growth slows in September as ‘wake-up call’ interrupts banner run

Staff unloaded cartons from a truck. Photo: Xinhua

A cargo ship loaded with containers berths at a port in Qingdao, in China’s eastern Shandong province. Photo: TNS

7 takeaways from China’s trade, inflation data in September

Staff members watch over the loading of containers at Nanning International Railway Port in Nanning, south China’s Guangxi Zhuang autonomous region. Photo: Xinhua

A cargo ship docks at the berth for loading and unloading operations at the container terminal in Lianyungang, China. Photo: NurPhoto via Getty Images

Chinese EVs face no roadblocks at Canton Fair despite high tariffs

At the autumn edition of China’s largest trade exhibition, the country’s electric vehicles and green tech were among the most popular attractions. Photo: Xinhua

Economist Joseph Stiglitz on the US-China trade war and the death of ‘hyper-globalisation’

Illustration: Victor Sanjinez

China’s steelmakers face ‘cruel’ reality as ‘harsh’ winter comes for embattled industry

Bundles of steel tubes at a trading market in the outskirts of Shangha. Photo: Bloomberg

Residential buildings under construction in Jinan in eastern China’s Shandong province. Photo: Bloomberg

Economy

News

China

Global Economy

China Economy

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


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


China exports

China manufacturing

China economy