Why Do China’s Steel Exports Remain At Elevated Levels?

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China’s steel exports rose 7.9% year-over-year in Q1 2016, to 112.4 million tons, following on from a 20% year-over-year increase in the year 2015. The country’s steel exports continue to remain at elevated levels as Chinese steel production has not been rationalized corresponding to the decline in domestic demand. This is borne out by the following table which illustrates the gap between steel demand and production in China, with most of the surplus production being exported. Though Chinese steel production fell 2.3% in the first four months of 2016, weakening demand for steel as a result of a slowing economy means that there is likely to be a big gap between production and demand again this year, which will spur exports. However, a spate of trade related cases against Chinese steel exports and the potential imposition of anti-dumping duties on these exports in various jurisdictions could negatively impact the volume of steel exports from China in the coming years.

Elevated Chinese Steel Exports

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Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for U.S. Steel

 

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