Steel Products Prices North America

Chinese Steel Tentacles Grip Globe

March 17, 2015

Chinese steel exports to the U.S. in January 2015 were 40 percent higher than in January 2014, according to World Steel Association data. As Chinese domestic demand weakens, exports have flooded not only the U.S. but nations across the globe. The resulting depressed prices and undercutting of domestic steel production has led to increased government intervention.

Alacero (the Latin American Association of Steel) reports rolled steel imports from China reached 1.1 million tonnes in January 2015, up 73 percent from the previous year. That is 11.4 percent of China’s 9.4 million tons of exported rolled steel.

Mexico received the greatest share of China hot rolled steel at 208,700 tons, followed by Brazil at 188,027 tons.

In a recent report, Alcero stated, “This accelerated growth in imports continues to damage regional production. It is necessary for governments to recognize the seriousness of this situation and to act promptly and effectively.”

India plans to raise the import duty on Chinese steel by 5 percent beginning April 1, raising the tariff to 15 percent. The trade ministry is also recommending anti-dumping duties ranging from $180 to $306 per tonne on stainless steel imports from China, Malaysia and South Korea. Approximately 40 percent of its stainless steel for industrial equipment is imported, mostly from China.

Chinese steel imports to the EU totaled 5 million tons in 2014, a 49 percent jump from 2013. The EU is investigating potential tariffs on a number of steel products from China. Among those is a tariff of 25 percent on stainless steel cold rolled sheet proposed by the European Commission. Others products include wire rod, and grain-oriented flat rolled electrical steel.

In tonight’s issue we are broaching a number of subjects concerning foreign steel trade and, in particular, how China is affecting the world and the United States steel producers. SMU believes that sometime within the couple of months the domestic steel producers will challenge flat rolled steel imports from China (and elsewhere).

At the end of this month the domestic mills will be meeting in Washington, D.C. to see if their voices will be heard by our nation’s politicians. The Congressional Steel Caucus “State of Steel Hearing” will take place from 8:30am-10:00 am, Thursday, March 26.

Steel CEOs John Ferriola (Nucor), Mario Longhi (US Steel) and Michael Rippey (ArcelorMittal & AISI) will testify. Also testifying will be Leo Gerard, International President, United Steelworkers ; Tracy Porter, President, Commercial Metals Company Americas Division; Douglas Polk, Vice President, Industry Affairs, Vallourec USA Corporation; and Carl Moulton, Chairman, the Specialty Steel Industry of North America.