Steel Overproduction in China — Crucial International Talks Fail
The problem of steel ‘dumping’ continues to grow, despite new rulings recently imposed. International talks aimed at finding measures to tackle the industry’s biggest ever crisis ended in failure and now a joint statement has been issued by several countries calling for immediate, urgent action to be taken that will curb China’s massive levels of overproduction.
The statement demands an ‘ongoing international dialogue’ be opened that will remove the ‘market-distorting’ policies around steel imports that are preventing complete transparency in the industry worldwide. The EU has signed the statement, along with Japan, South Korea, Turkey, Switzerland, Mexico, Canada and the US. Representatives from these countries met to talk in Belgium but the only conclusion reached (a conclusion that many believed to be foregone) was that ‘overcapacity must be dealt with in a swift and structural way.
Steel production in China has massively expanded, growing in size by a factor of more than 12 - output from the EU has fallen 12% in this time and that of the US has remained largely stable. Steel from China is now sold at extremely low values, with critics saying it is even sometimes sold at a loss, distorting the market.
The country has dismissed claims of steel sold at a loss and says that it is trying to curb overproduction. Official statements from the official news agency in Beijing say that China feels it is being unfairly blamed for the problems in the global industry. China itself has problems due to overproduction – any major cuts in output will lead to many redundancies and potential social instability and so the country is unlikely to take this action. Unless the domestic demand for steel in China increases dramatically, exports will continue to remain at a low price around the world. 822m tonnes are year are currently produced by China, far in excess of what can be domestically absorbed.
Throughout the changing times of steel, BS Stainless has remained a cutting-edge, forward-thinking company with dynamic policies that ensure the best deal for our customers in terms of both quality and cost. We continue to invest in our company, which grows in size and importance despite the many problems faced in the industry as a whole - our most recent investment in unique, UK-built machinery to create acoustic barriers and related products is a shining example of how we are not only surviving against all the odds, but actively thriving against them.