China blames weak demand for global steel crisis

China blames weak demand for global steel crisis

China’s steel exports jumped 30 per cent to 9.98 million tonnes in March from a year ago

Source: PTI

Blamed for dumping its excess steel overseas, China refuted the criticism for triggering an international steel crisis and tried to lay the responsibility instead on a weak global demand and the economic slowdown.

"The bulk of our steel products are consumed domestically. China does not subsidise its products to promote exports," Ministry of Commerce (MoC) spokesperson Shen Danyang said. "The government has taken action to address steel overcapacity. Notable progress has been made," Shen told reporters here adding that China will continue to expand domestic consumption of steel products.

China, the world's top steel producer, has increased steel exports in recent years. Its steel exports jumped 30 per cent to 9.98 million tonnes in March from a year ago - despite a number of anti-dumping measures implemented globally. The dumping of China's excess capacity overseas amid allegations that it subsidises its loss-making steel companies has led to a global glut.

Last week, tens of thousands of German steel workers hit the street, demanding more measures against the dumping of cheap Chinese imports and greater job protection. Britain's largest steel producer Tata Steel has announced plans to pull out of the country, threatening 15,000 jobs. The Tata Steel crisis was also blamed on China for flooding the market with products at artificially low prices.

According to Shen, overcapacity is a problem for all steel-producing countries, and it is a common challenge that needs to be addressed by all countries together. Officials from nearly 30 countries and international organisations met in Brussels, Belgium, on Monday to discuss the challenge overcapacity poses to the global steel industry.

"This shared problem needs to be tackled with shared efforts," a position paper disseminated by the Chinese delegation during the meeting said adding that it was incorrect to blame international trade for the difficulties.

"Frequent use of trade remedy measures and other import- restrictive measures is not addressing the root cause of global steel overcapacity," state-run Xinhua news agency quoted the paper as saying.

China shut down outdated facilities with a production capacity of over 90 million tonnes from 2011 to 2015. In the coming five years, China will continue to reduce crude steel capacity by 100 million to 150 million tonnes.

The Dollar Business Bureau - Apr 19, 2016 12:00 IST