China’s steel industry was among the main concerns in the global steel market amid growing steel exports.
At the Irepas steel industry conference held in Paris on Sept. 16, Wee-Jin Yeoh, secretary general of the South East Asia Iron and Steel Institute, said the rise of Chinese export volumes to Southeast Asia and planned capacity expansions in that region are “unsustainable,” making the next two years difficult for the region amid a trend towards “de-greening.”
China has increased exports in recent years due to capacity utilization at over 80% while domestic demand has been decreasing. On Aug. 13, China’s Baowu Steel Group warned that China’s steel industry is facing a more severe situation than seen in 2008 and 2015 amid plummeting domestic Chinese prices.
China predominantly exports flat steel products to Southeast Asia, amounting to 25 million mt, or 28%, of China’s total steel exports in 2023, according to SEAISI.
Overcapacity in Southeast Asia will lead to an “explosion” of carbon emissions in the region, Yeoh said. Southeast Asia still has relatively young blast furnaces, with comparatively high carbon emissions and will see new blast furnace-basic oxygen furnace capacities come on stream. SEAISI expects 83% of steel production in the region to be done in blast furnaces by 2030, up from 71% in 2024.
Trade barriers on the rise
China’s rapid increase in cheaply priced steel product exports to many regional markets over the past two years has heightened protectionism worldwide with further escalation possible, while global steel prices are likely to remain low, GMK Center, a Ukraine-based steel consultancy, said in a report Sept. 18.
Steel anti-dumping investigations worldwide rose to 14 as of early July from five in 2023, of which 10 and three, respectively, concerned Chinese products, according to GMK.
Among countries and regions already imposing restrictions or conducting AD probes against Chinese steel products are: the European Union, the US, Canada, Vietnam, Turkey, Mexico, Brazil, Thailand, South Africa, and Saudi Arabia, GMK said.
China’s finished steel exports in August rose 21.3% from July and 14.7% from a year earlier to 9.50 million metric tons, the third highest so far in 2024, the country’s customs data showed.
Over January-August, the Chinese exports increased 20.6%, or 12.03 MMt, from the year before to 70.58 MMt.
Its finished steel exports are on track to surpass 100 MMt in 2024 for the first time since 2016, after rising in August, market participants told S&P Global Commodity Insights.
“Under these circumstances, protectionist trade policies for steel products have become more evident not only in Europe and the US but also in Asia, and Japan is now in a situation where some concrete countermeasures are necessary,” Tokyo Steel said as it cut its October list prices in September.
