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Steel trade drama unfolding

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In the theatre of global steel in 2015, we already know the stars – China, Japan and South Korea.

Since 2008, these three north Asian steel giants have accounted for over half of global steel consumption and supplied over half the world’s steel.

Indeed, according to WorldSteel in 2013, these three produced 61% of all steel made and consumed 56% of it themselves.

But what we don’t know for 2015 is the plot.

Sure, raw materials prices (or more specifically, their further softening) will figure prominently. But there’s a strong chance that in the unfolding drama steel trade that in the past has had only a bit part will take center stage.

Here’s why. Preliminary estimates from the China Iron & Steel Association had Chinese steel exports for 2014 reaching another all-time high of 80-85 million metric tons, up from 50.3 million mt in 2013 and double the 2012 result of 37.6 million mt.

However, in November CISA vice-chairman Wang Xiaoqi, told delegates at an industry conference in Hangzhou, in Zhejiang province, that the country’s steel exports may actually reach 90 million mt in 2014.

By December, industry watchers within China were already saying privately that 2015 would not only see 2014’s record broken but that shipments abroad may climb to 100 million mt.

Behind the Chinese export binge, of course, has been Chinese steelmakers wallowing in surplus capacity, scrambling to find new buyers for their steel when demand at home is softening.’

There is nothing especially new about the drama.

In recent years steelmakers and national and regional steel associations in Asia have been increasingly vocal in their complaints about Chinese steel imports, arguing these are destabilizing their home steel markets.

For a while during autumn the market was alive with rumors that Beijing would tinker with the prevailing regime of rebates and duties on steel exports, with major changes tipped to take effect from January.

The market chatter about rebate changes has since stilled yet exports could still emerge as a key issue in 2015.


Zhejiang Yaang Pipe Industry Co., Limited

Article Categories:
Metals · Steel

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