Chinese export surge alters global steel dynamics
Time:Fri, 28 Jun 2024 05:40:19 +0800
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China's escalating export volumes are reshaping global trade dynamics, triggering heightened trade restrictions and slowing economic growth worldwide. The ripple effects are particularly severe in the steel sector, where Chinese exports are exacerbating market pressures.
The Chinese real estate market, a major driver of steel demand, is in crisis with new housing sales plummeting consistently: down by 19% in 2021, 31% in 2022, 26% in 2023, and a further 28% year-on-year by early 2024. This downturn, compounded by sluggish infrastructure projects, poses a critical challenge as construction traditionally consumes 50-60% of China's steel output.
While China pivots towards boosting its mechanical engineering sector, industrial production showed a promising 7.2% year-on-year rise in the second quarter of 2024. However, this growth cannot offset the slump in construction, leading to an oversupply of steel products that are now flooding global markets. In 2023 alone, Chinese steel exports surged by 36.2% compared to 2022 figures.
In response, regions like the EU and Turkey are fortifying their defenses against China's imports, with Turkey launching anti-dumping investigations against Chinese steel products. The U.S. raises tariffs to 25% on Chinese steel imports to shield its domestic market from overcapacity impacts.
As global steel markets brace for further disruptions, countries like Ukraine are intensifying anti-dumping measures to safeguard local industries. The evolving landscape underscores the urgency for proactive policies to mitigate the adverse effects of China's export strategies on global steel markets.
