Chinese steel glut prompts call for stronger anti-dumping measures

China’s growth slowdown is prompting concerns
from steelmakers such as BlueScope and Arrium of dumping.

“If
China’s [steel] demand profile comes off it hurts everyone… if you have
producers trying to post as many tonnes as possible to customers they are
likely to give up some margin,” an unnamed analyst told Fairfax.

The
country’s net exports of steel are increasing sharply, with net exports of
steel up to 76 million tonnes last year (from 61 million the year before).

China
is closing some of its mills, but it is still subsidising many, rather than
have them sack workers. Social policy, as well as economic policy, is a
consideration in keeping mills open while operating at a low profit.

Arrium’s
CEO Andrew Roberts has said that the steel glut in China was pushing prices
down, and other countries were being more proactive than Australia when it came
to the dumping of imported Chinese steel.

Dumping
is when goods are exported and sold at a loss.

BlueScope
said more needed to be done to close loopholes in dumping laws, which allow
importers to avoid duties through adding things such as boron to steel.

China’s
annual GDP increase has slowed to 7 per cent as it moves to shift its economy
towards consumption-driven growth. Construction figures, such as new property starts,
are down considerably.

As reported last week, official figures showed China’s steel production fell 1.7
per cent compared to the first quarter compared to the first quarter in 2014.

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