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Weak business results due to the gloomy real estate market forced businesses to cut costs to maintain operations. These are the difficulties and challenges that the China steel industry has to face.Recently, China's large steel enterprises have announced that their business profits have decreased. It also mentioned obstacles that China steel enterprises are expected to face in the second half of this year. It is known that the reasons for these obstacles stem from low consumption demand and pressure to cut costs.According to the China Iron and Steel Association (CISA), this industry has reached a critical turning point in demand. CISA also concurs with the view of low consumption and persistently thin margins.In the first 5 months of the year, nearly half of China's giant steel mills had a loss in business results; although the number of orders increased, sales still declined. These are also two big problems that China's steel enterprises have to face at this time.China is known as the country with the most developed steel industry in the world, with more than 50% of steel production being produced in Chinese factories. However, the majority of input materials for steel production are imported from Australia and Brazil.China's steel market has just recovered due to the impact of the COVID-19 epidemic and the crisis in the real estate market. The real estate market and infrastructure construction account for about 60% of China's steel demand. However, infrastructure investment stimulus programs have slowed, while the real estate market is also growing slowly. Meanwhile, the Chinese government continues to encourage mergers and cuts to address persistent oversupply. It can be said that China's steel industry is undergoing reform, but progress is relatively slow.The Chinese government has not yet taken drastic measures to boost the country's domestic demand for steel. The profit of the steel industry is low, but the price of input materials for steel production is relatively high. This affects steel prices, leading to a gloomy domestic consumption market.In the context of weak domestic demand, forcing China steel enterprises to boost exports. However, the fact that factories boost exports to free up inventories means that selling prices are continuously falling. In May, the country's steel export price fell below $1,000 per ton ($920 per ton).According to a report by Marubeni Research, the level of oversupply (determined by subtracting consumption from crude steel production) in the first five months of 2023 has reached the highest level in the past seven years of the China steel industry.

China's steel export output is forecasted to reach a record level in the past 7 years when the export volume from January to May has reached 36.4 million tons. The declining domestic demand and the depreciating currency have encouraged manufacturers in this country to promote exporting to deal the inventories.China's steel export is predicted to hit a new record in 2023Recently, some analysts indicated China will reach the steel export milestone in 2023 with an output in the range of 66-77 million tons, this is the highest milestone for 7 years ago. Specifically, in the time of period from January to May 2023, China's steel exports reached 36.4 million tons and increased by 41% over the same period last year. This development trend is expected to continue until the end of the year. It is possible that the total export volume of China by the end of 2023 will increase by 10% compared to 2022.Customs data shows that China's steel exports in May reached 8.36 million tons, which is the highest figure since September 2016. There are also some predictions that steel export volumes may decrease in June but very quickly it will grow again in July and August due to strong demand coming from Korea and Southeast Asian countries.China’s steel export volume is likely to hit a new record in 2023The reasons for China's steel exports surgeSome of the reasons for the sudden steel export output in this year come directly from the weakening domestic demand and the decreasing of the yuan. The chaotic domestic steel industry has forced steel producers in China to shift exports to overseas markets with higher demand in order to deal with inventories.Production increases but domestic demand weakensChina's real estate began to weaken in 2022, this recession dealing a strong affection to domestic steel manufacturers because the construction sector has always been the largest steel consuming sector. Construction projects in the real estate sector here from January to May have decreased by more than 7% compared to the same period last year.On the other hand, steel production output has reached the optimal level, at the end of June, blast furnace utilization rate (BAF) among 247 steel mills reached 92%, this is an all-time high number since 2021 to present. The constant increase in productivity while the demand from real estate is weakening has made the factories here look to export as a solution to reduce the inventory load.The Yuan depreciatesThe yuan has depreciated by nearly 7% against the US dollar since the beginning of the year. The fall renminbi exchange rate has brought opportunities for steel exporters in China as the export prices will be cheaper and provide them some advantages with the other manufacturers abroad. Beside that, the low price steel from China producers brings competition to other exporting countries.Consumption demand increased in some areasIn the context of the global economic recession, which has significantly affected the demand for steel in many countries. However, there are still some countries in the Middle East and North Africa that have shown strong consumption in the half of 2023. Currently, Middle Eastern countries are gradually investing in infrastructure projects to boost the economy instead of depending on oil as before, so the amount of steel imported from China entering this region has grown very strongly.The inflation situation in countries in Southeast Asia has made it easier to import Chinese steel because the price is extremely cheap. In addition, the demand for steel in some countries in this region is also boosted by some infrastructure projects sponsored by China contractors. However, Vietnam was out of the forecast because the demand for steel in Vietnam in May decreased by 15% compared to the previous month, the reason coming from the slow construction activities and projects.Some regions have high steel importing from ChinaSome risks of trade remedies from China's steel exportsThe growth in China's steel export generated concern for many steel producers in other importing countries due to fierce price competition. Some experts say that Chinese steel export shipments are harming foreign manufacturers because increased steel imported volume will force domestic steel mills to reduce output.India - a new power in global steel production is considering imposing countervailing duty on steel imports from China. In 2022 last year, India imposed anti-dumping duties on Chinese stainless steel pipes to protect the profits of domestic steel producers.Vietnam's steel industry proactively responds to trade competitionThe increasing steel production along with a favorable price can produce some advantages in exporting but it can also bring trade defense lawsuits. China is considered the world's largest steel producer today, but in fact this country is facing a lot of investigations and a series of anti-dumping decisions from other countries.Vietnam is also a new potential country in the field of steel production, Vietnamese steel products are not only present in the Southeast Asian market but also in Europe and America. However, the rapid increase in export volume means that many other countries will pay attention and domestic steel products will face anti-dumping lawsuits in the future.Facing the risks of trade remedies, the Vietnam Import-Export Department in recent years has promptly established agreements signed between many countries, including Free Trade Agreements (FTAs) such as the Vietnam Trade Union Agreement (FTA) and the Vietnam Trade Union Agreement (FTA); the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the Vietnam-EU FTA (EVFTA)... have opened up great opportunities for Vietnam's steel industry to export more easily. 

In October 2021, the European Commission imposed a definitive anti-dumping duty of up to 24.6% on Chinese flat-rolled aluminum products. However, this decision was suspended for 9 months because of specific effects on lines 7060 and 7607 supply. After the review process, the EU lifted this suspension and continued to impose anti-dumping duties on China from July 12, 2022.1. EU: impose temporary anti-dumping duty on flat-rolled aluminum products imported from ChinaOn August 14, 2020, the European Commission received a European Aluminum complaint about the dumping of flat-rolled aluminum imported from China. The products under investigation include plates and roll with a thickness of 0.2 - 6mm as well as coils and strips with a thickness of 0.03-0.2mm, except for aluminum sheets used in the beverage packaging industry, car cover, or aerospace industry application.They are grouped under the HS codes 7606.11.10, 7606.11.91, 7606.11.93, 7606.11.99, 7606.12.20, 7606.12.92, 7606.12.93, 7606.12.99, 7606.91.00, 7606.9 and 7607.11.90.At the conclusion of the investigation, the European Commission implemented anti-dumping measures with duty rates ranging from 19.3 to 46.7% for flat-rolled aluminum products imported from China, effective from 13/04/2021.Specifically, shaped aluminum of Guangdong Haomei New Materials Co Ltd and Guangdong King Metal Light Alloy Technology Co Ltd will be subject to an anti-dumping duty of 21.2%, while that of Press Metal International Ltd is to a duty of 25%. Other companies that "cooperate" in the investigation are 22.1%, and materials from other companies are on duty at 32.1%.2. EU: imposing a definitive anti-dumping duty on flat-rolled aluminum products imported from ChinaBy October 12, 2021, the EC had imposed definitive tariffs of up to 19.1-24.6% on flat-rolled aluminum products imported from China to limit dumping, causing damage to the industry of Europe. Flat-rolled aluminum products are one of the core products of EU steel with a market value of 700 million euros.However, on the same day, the Commission suspended the imposition of anti-dumping measures for a period of 9 months (according to the EU Basic Anti-Dumping Regulation, Article 14) to address market fluctuations that occurred after the investigation phase. The demand for aluminum products in the EU market is increasing, so the imposition of anti-dumping measures at this stage will cause supply disruptions and many other severe effects on trade cooperation with China in the future.3. EU: not to prolong the suspension of the definitive anti-dumping duties on imports of flat-rolled aluminum products from ChinaOn 9 March 2022, the European Commission sent a request to the European Aluminum Association and domestic producers to investigate whether the suspension should be extended or not. After considering market movements during the period of analysis (PoA), fluctuations in the aluminum industry that may occur in the near future, the views of importers, exporters, and the EC have decided not to extend the anti-dumping suspension of AFRPs originating in China.Thus, from July 12, 2022, China's flat-rolled aluminum products will be subject to the prescribed anti-dumping tax rate when imported into the EU.Antaike data show that China exported 380,000 tons of aluminum to the EU in 2021, down 17.6% compared to the same period last year. Under the EU's plan, Chinese exporters will be required to declare a carbon border tax from 2023 and be taxed on products that don't meet carbon emission regulations from 2026. These regulations will significantly affect the export of flat-rolled aluminum products from China to the European market. Besides, the challenges of supplying quality and cheap AFRPs to EU importers will increase in the coming time.

On October 7, 2020, the EU officially imposed a definitive anti-dumping duty on hot-rolled stainless steel coils and sheets (SSHR) imported from Indonesia, China, and Taiwan. This move is to protect the interests of manufacturers in the European Union such as Belgium, Italy, and Finland against dumping by foreign enterprises. This decision contributed to the protection of nearly 200,000 domestic steel industry jobs and increased the EU's total number of trade remedies measures to 56.1. EU imposes temporary anti-dumping duty on steel imported from Indonesia, China, Taiwan1.1. Steel groups are imposed anti-dumping dutyOn June 28, 2019, the European Steel Association (Eurofer) accused manufacturers of hot rolled stainless steel coils and sheets (SSHR) from Indonesia, China, and Taiwan of dumping, affecting domestic manufacturers and market steel prices. The European Commission accepted the complaint and initiated an anti-dumping investigation on the products subject classified under the HS codes of HS 7219.11, 7219.12, 7219.13, 7219.14, 7219.22, 7219.23, 7219.24, 7220.11 and 7220.12.The general director of EUROFER said that the steel industry of Indonesia, China, and Taiwan have too much capacity, so they export cheap SSHR to European Union nations. Their dumping has caused a lot of damage to the European steel industry, so remedial measures are necessary.1.2. The temporary anti-dumping duty rate for Indonesia, China, and TaiwanOn January 25, 2020, the EC requested import registration for goods from Indonesia, China, and Taiwan for a period of 9 months. Regulations imposing import registration requirements officially took effect on January 24, 2020.On April 8, 2020, the European Commission issued Regulation (EU) 2020/508, imposing temporary anti-dumping duties on goods imported from Indonesia, China, and Taiwan, specifically:The duty rates for imports from China range from 14.5 to 18.9% of the net free-at Union-frontier price before duty depending on the company.The duty rate for imports from Chinese Taipei ranges from 6 to 7.5% of the net free-at Union-frontier price before duty depending on the company.The duty rate for imports from Indonesia is 17% of the net free-at Union-frontier price before duty depending on the company. 2. EU imposed definitive anti-dumping duty on Indonesia, China, TaiwanOn October 7, 2020, the European Commission imposed definitive anti-dumping duty on SSHR from Indonesia, China, and Taiwan. Specifically:The duty rate for imports from Indonesia is 17.3% of the net free-at Union-frontier price before duty depending on the company.The duty rate for imports from Taiwan is 4.1% or 7.5% of the net free-at Union-frontier price before duty depending on the company.The duty rate on imports from China is 9.2 - 19% of the net free-at Union-frontier price before duty depending on the company.One of China and Indonesia's most important industrial exports is stainless steel sheet and cold-rolled coil. Although there is no accurate report on the damage from the new anti-dumping duty from the EU,  it will have a direct impact on the two countries' export and production activities. Faced with the risk of oversupply and great economic damage, the countries involved have made recommendations and objections to the EU's decision to impose anti-dumping duties.Accordingly, the European Commission issued the Commission's Implementation Regulation (EU) 2020/1713 on November 17, 2020, amending the definitive anti-dumping duty rate on SSHR imported from China, Taiwan, and Indonesia in the case of a specific safeguard duty is also applied to the same good. If the official safeguard duty rate is 25% out-of-quota, importers are exempt from anti-dumping duties. 

On March 1, 2023, the UK’s Trade Remedies Authority announced the extension of anti-dumping measures on High Fatigue Performance Steel Concrete Reinforcement Bars (HFP) imported from China. This makes domestic businesses concerned about the disruption of the supply of good-priced steel.1. The UK: Applying anti-dumping duty on rebar imported from ChinaHFP rebar, also known when massed as reinforcing steel or reinforcement steel, is a major material in the construction industry with a high bearing capacity to reinforce steel structures. The use of HFP Rebar in construction has brought a value of more than £108 billion to the UK economy.During the period from April 1, 2020, to March 31, 2021, the UK imported 3,600 tons of rebar from China. In the long run, the government was worried about dumping that could cause the domestic steel industry to suffer significantly because of cheap supply.Therefore, the European Commission imposed anti-dumping duties on HFP bar steel under the HS code 72 14 20 00 10, 72 28 30 20 10, 72 28 30 41 10, 72 28 30 49 10, 72 28 30 61 10, 72 28 30 69 10, 72 28 30 70 10 and 72 28 30 89 10 imported from China. Those trade remedy measures were in effect from July 2016 to the end of July 29, 2021, without needing to be reviewed.2. The UK: Proposal to extend trade remedies with rebar imported from ChinaThe UK's Trade Remedies Authority (TRA) proposed to continue to extend the anti-dumping duty at 18.4-22.5% for HFP rebar imported from China. Faced with the tense war situation of Russia-Ukraine, the British government is also concerned about negative impacts on the steel industry and causing a shortage of rebar. Therefore, continuing to extend trade remedies with this product might affect the general economic interests of the country.However, after reviewing the feedback from stakeholders and new economic forecasts, TRA found that steel imports from Russia, Ukraine, and Belarus could be substituted from other countries such as Portugal, Spain, and Turkey. Therefore, the extension of anti-dumping duty did not disrupt the domestic steel supply. The relevant parties had requested until the end of October 14, 2022, before the Ministry of International Trade made a final decision.3. The UK: Continue to extend anti-dumping measures with rebar imported from ChinaOn March 1, 2023, the United Kingdom officially extended anti-dumping measures on construction rebar (HFP) imported from China. This decision was made after the Trade Remedies Authority (TRA) conducted a review of the petitions to cancel the trade remedy measures applied since 2016.According to Minister for Business and Trade - Nigel Huddleston, protecting domestic steel producers from unfair competition is a top priority for the government. Thus, the anti-dumping duty on Chinese rebar will be in effect until the end of July 2026.4. The UK: Vietnam's important steel export marketAccording to WTO statistics, by the end of June 2022, the UK has investigated a total of 04 trade remedies and applied 1 measure (transitional safeguard mechanism with steel products).According to the EU – UK Withdrawal Agreement, from January 1, 2021, the UK is no longer a member of the EU, and safeguard measures on steel products are carried out independently between the EU and the UK. After this event, both the UK and the EU conducted a review and updated the trade protectionism being applied.For Vietnam, the UK is currently only applying safeguard measures for steel products. In March 2022, The Trade Remedies Authority initiated an investigation and review of safeguard measures with steel products. In June 2022, they issued a final report, according to which Vietnam applied a separate tariff rate quota on a quarterly basis and a residual tariff quota for some steel products from July 1, 2022, to June 30, 2024.Thanks to the UKVFTA Free Trade Agreements, Vietnamese businesses have an edge over many other countries. According to data from Vietnam Customs, two-way trade turnover between Vietnam and the UK will reach nearly 6.84 billion USD in 2022, up 3.4% compared to 2021. Exports will reach 6.07 billion USD, up 5.2%, exports of iron and steel of all kinds to the UK reached 155.7 million USD, and products from iron and steel reached 63.3 million USD.Hopefully, the information about the UK's extension of anti-dumping duty on Chinese steel will help you update more about the world's steel market situation. Don't forget to follow and read the latest news about the steel industry in Vietnam and the world at MRS Steel!