Steel Associations underscore negative impacts of granting MES to China

By Paul Ploumis (ScrapMonster Author)

December 09, 2015 02:01:00 AM

SEATTLE (Scrap Monster): Nine steel associations have taken a common stand against granting of Market Economy Status (MES) to China by December 2016. A unified position by these associations was announced during the Paris summit on Dec 1st.

The nine associations are the American Iron and Steel Institute, the Steel Manufacturers Association, the Canadian Steel Producers Association, CANACERO (the Mexican steel association), Alacero (the Latin American steel association), EUROFER (the European steel association), Instituto AcoBrasil (the Brazil Steel Institute), the Turkish Steel Producers Association and the Committee on Pipe and Tube Imports.

According to the associations, Chinese state is seen playing a significant role in many key aspects of the Chinese economy, especially in its state-owned and controlled steel sector. As a result, there is no question that China remains very much a non-market economy today.

The country’s steel overcapacity has only grown during recent years. According to the steel groups, China is the main contributor to the global steel industry’s overcapacity crisis. The country’s overcapacity ranges from 336-425 million metric tonnes. Also, Chinese steel exports to other countries have surged higher. The dumping of cheap products from China has badly impacted domestic steel sector growth in many countries worldwide.

Granting of MES before China implements necessary reforms to its distorting policies would lead to negative consequences, the associations noted.