- Steelmakers globally have been hit by a slowdown in demand
- Associations say China is main cause of excess capacity
The steel market is being overwhelmed with metal coming from China’s state-owned and state-supported producers, according to a collection of industry associations.
The market “is suffering from a crisis of overcapacity and the Chinese steel industry is the predominant global contributor to this problem,” the nine associations, including Eurofer and the American Iron and Steel Institute, said in a statement Thursday.
Steelmakers around the world have been hit by a slowdown in demand with China’s economy in the weakest expansion since 1990. The country is still churning out cheap exports that undercut local production and overseas sales will likely exceed 100 million metric tons this year. That’s more than the annual production of Europe’s top four countries combined.
Cheap imports have sent prices of the metal tumbling to levels seen during the global financial crisis and eroded profits and margins for producers around the world. That spurred a raft of trade cases from Europe and the U.S. against Chinese exports.
The nine associations said that there is almost 700 million tons of excess capacity around the world, with China contributing as much as 425 million tons. Recognizing China as a market economy at the end of next year would be premature and have “enormous” economic and social impacts, they said. The statement urged governments to assess the role of the Chinese state in its steel industry.