Global Steel Industry Oversupply Due to China Boosting Exports
Steel NewsDate: 01-04-2024 by: Nhu Quynh
As a country with a developed steel industry providing more than 50% of global steel output, however, China is now massively exporting steel, causing concerns about global oversupply. The main reason comes from the weakening of the real estate market, which causes the country's domestic consumption to decline. Join MRS Steel to learn more through the article below!
China's steel industry boosts exports
According to a report by the National Bureau of Statistics, in the first 2 months of 2024, China exported nearly 16 million tons of steel, an increase of 32.6% over the same period last year. This is also considered the highest steel export level of the Chinese steel industry from 2016 until now.
According to Nikkei Asia, China's steel exports this year will equal or exceed last year's level, as China is on track to export about 90 million tons of steel and closer to 110 million tons in 2015, when it will witness an increase in anti-dumping measures around the world. This shows that the Chinese government is gradually stimulating the country's economic recovery.
China just reported its highest steel export figures in eight years
Currently, China provides about 55% of the world's steel output. Therefore, even a small increase in exports can lead to downward pressure on prices in world markets. Therefore, the Chinese steel industry's promotion of exports has affected the steel industries of other countries, especially Southeast Asian countries, which are China's main export markets. In September 2023, the country's steel exports to Thailand increased by about 60% year-on-year, with exports to Malaysia increasing by about 80%. The amount of steel exported to Indonesia doubled and to Vietnam more than quadrupled.
Pressure for Vietnam's steel industry
A large amount of imported steel from China continuously floods the Vietnamese market, causing great pressure on the domestic steel industry. In just the first 2 months of 2024, the amount of steel imported from China reached 1.8 million tons, of which Vietnam's HRC alone imported from China reached 1.4 million tons, accounting for 74.2% of the total amount of HRC imported in the first 2 months of 2024.
The reality of China's steel imports increasing sharply in the context of Vietnam enjoying an import and export tax of 0%. Trade defense measures have been lifted; other steel products, such as galvanized steel sheets, color steel sheets, steel pipes, prestressed steel,... are not subject to any trade defense measures. Facing pressure from imported steel, since 2023, the Vietnam Steel Association has made recommendations to the government to strictly control the import of steel products into the Vietnamese market.
Chinese steel exports a lot, causing pressure on Vietnamese steel
As China increases steel exports, the country is turning to high-value-added products, putting pressure on domestic steel producers such as Hoa Phat, Hoa Sen, Ton Dong A,... Once again, Vietnam's steel industry faces a big challenge when it has to compete with cheap steel sources from China. This raises a warning bell for Vietnam's steel industry to have appropriate policies to ensure its development. development of domestic steel enterprises.
Above is the information that MRS Steel sends to you about the problem of the world steel industry having excess supply because the leading country in steel production, China, is promoting exports. With China promoting exports, it not only affects Vietnam's steel industry but also the steel industry of other countries.
