Chinese Steel Demand Falling, Exports Rising, More Tariffs Coming

Steel demand is down. Xinhua: 国内钢市需求持续低迷 全球铁矿石价格再度掉头向下

...spot steel market is demand continues to slump, the decline in steel prices increase. Global iron ore market after a short-term rebound, prices once again turned down, tons of price back below $ 60.

According to the latest market report of the well-known steel information organizations "My iron and steel" to provide the domestic spot steel price index closed at 89.75 points, down 1.47 percent week. Steel City is currently characterized by downstream demand continues to slump, steel production has remained at a high level, more pessimistic outlook for the business, all of these "negative" factors make the spot steel prices decline increased. Even if the recent approval of the relevant state departments focused message railways and other investment projects, but limited short-term impact on the steel market.

According to the analysis, in the construction steel market, the price declines have intensified. Shanghai, Hangzhou and other places tonne price fell 10-220 yuan a week; wherein, Guangzhou, Chengdu and other places have fallen hundred dollars or more. The case with the "common" is: the market demand continues to slump, traders bearish sentiment increased, prices fell after another, the stock market decline slowly. Most businesses now is how to ship as soon as the primary consideration.

This probably doesn't help matters, at least until Indian infrastructure investment takes off: India outpaces China in steel production, up 6.7% this year

This definitely doesn't help: China's steel sector hit by new round of anti-dumping probes

China's steel producers are dealing with what the sector has described as a "Black May" after several countries followed Europe and launched or have decided to launch investigations into alleged dumping.

In mid-May, the European Union started an investigation into claims that China and Russia were selling cold-rolled flat steel for the manufacture of cars and home appliances at below market prices. The EU also decided to impose provisional anti-dumping tariffs on steel products from China, Russia, South Korea, Japan and the United States after considering a complaint lodged by European steel producers in June 2014.

Duties of 28.7% were imposed on China's Baosteel and Wuhan Iron and Steel Corp for their grain-oriented electrical steel, which is used mainly by power producers and distributors. Other countries such as Canada, Peru and Brazil also plan to launch or have launched similar investigations.

Mexican businesses meanwhile are calling for a government anti-dumping tariff on Chinese steel imports, while Turkey has hiked its tax on steel imports from China, which jumped nearly 300% during the first three months of the year.

This isn't going to help either: Chinese Steel Exports Rising

In previous years it has sought a more conciliatory position to complaints by trade partners, a WSJ article says in the past CISA, China’s steel trade association, has sought to persuade local steel mills to curb exports and show restraint but this year, in the face of an unprecedented surge in volumes, Ministry of Commerce spokesman Shen Danyang is quoted as taking a much more defensive line saying the rise in steel exports is due to higher global demand and is a result of Chinese steel products having strong “export competitiveness.”

...Meanwhile, the WSJ adds the US, Australia and South Korea have also signaled that they are lining up support for trade action against Chinese steel exports, which rose by 50.5% last year to a record 93.8 million metric tons and have continued at a high level this year.

Chinese steel mills are on a roll according to data reported by the WSJ. Between September last year and January this year, the volume of China’s outbound steel shipments each month shattered the preceding month’s record. While in the first four months of 2015, steel exports were 32.7% higher than a year earlier.