Increased Trade Friction to Further Affect China Steel Exports

Shanghai, Mar. 28 (SMM) - In recent years, China has become a net exporter of steel products from a net importer, but more and more trade friction has become a major influential factor on China’s exports of steel products. According to the Commerce Ministry, China suffered the most trade friction for 17 consecutive years. Since the beginning of 2012, China has suffered 8 trade friction cases, with the amount up to USD 2.28 billion, up 80% YoY.

Steel and steel-made products are one of products suffering the most anti-dumping and anti-subsidy investigations. From March 19 to 20, the US made two anti-dumping and subsidy duty rulings for steel products, that is, steel wheel and galvanized steel wire, finding exports of the two kinds of Chinese exports to the US existence of dumping or subsidies. On March 22, the US Commerce Department announced to launch anti-dumping and anti-subsidy investigations over China-made stainless steel sink. Besides, Taiwan’s Ministry of Finance decided on March 26 to initiate an anti-dumping investigation over cold-rolled carbon steel products from China.

Steelease believes China’s steel and steel-related products will suffer more trade friction in the future for the following points.

First, some countries will step up efforts to protect domestic manufacturing industries for economic growth and employment concerns amid a slowing global economy. For the upcoming presidential election in the US, the US government will find a way to increase employment to meet part of the voter’s political factors, and trade friction is a lot of reasons related to employment.

Second, domestic steel prices have been at low levels after tumbling in September 2011 along with slowing economic growth and capacity surplus, highlighting price competition of domestic steel producers in overseas markets. This has added to other countries’ concerns over the existence of dumping of Chinese exports.

To sum up, Steelease believes that the outlook for China’s steel exports will not be optimistic in 2012, given economic growth slowdown in US and European countries and the RMB appreciation. The increased trade friction will no doubt affect China’s exports of steel products. 
 

(Note: the attachment is the list of trade friction cases for China's steel and steel-made products from 2011 to 2012.)