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Economic Review: China's Steel Export Capacity on Risk to Be Overstated

Posted on: Thursday, 30 March 2006, 09:00 CST

Economic Review: China's steel export capacity on risk to be overstated

BEIJING, March 29 (Xinhua)-- "China's steel output is sufficient to meet domestic demand, with only a limited amount left for export, " said a Chinese expert, calling for an objective examination of China's steel export capacity.

Qi Xiangdong, deputy secretary general of the China Iron and Steel Association, told a major steel industry conference which opened in Beijing on Tuesday that China's steel export capacity should not be overstated.

Qi's remarks came in response to many overseas steel giants which believe China's fast-growing steel industry may be a new threat to them in competing for global markets.

As early as 2000, he said, China met with an anti-dumping investigation from the United States that was targeting its armor plate exports. More anti-dumping investigation cases against China's steel industry began in August and November last year.

Although these cases were finally concluded in favour of China, China's steel exports and its surging steel output, are drawing more attention from other steel production bases in the world, said Qi.

But Qi noted that although China imported about 25.82 million tons of rolled steel and 1.31 million tons of billet last year, its exports of rolled steel and billet was 20.52 million tons and 7.07 million tons respectively, amounting to net exports of only 123,000 tons steel.

Qi forecast that China's steel imports and exports will be equal in 2006 at about 20 million tons each.

"For a country with an annual steel production capacity of 400 million tons, China's steel trade won't pose a threat to any country," said Qi.

Qi went on to say that in the coming years, rising domestic demand will consume China's rising steel output to meet the requirements of the government's strategy of building a new socialist countryside and accelerating urban construction.

According to Qi, China's domestic steel consumption this year from eight major industries (construction, machinery, light industry, automobile, coal, shipbuilding, container and petrochemistry) will amount to 369.2 million tons, 42.38 million tons or 12.97 percent more than last year.

Qi acknowledged that China's crude steel output in 2006 is expected to hit 392 million tons, a year on year increase of 11.3 percent, and output of rolled steel this year will also increase 10.9 percent to 440 million tons.

But Qi added that China's steel consumption in 2006 is to increase 12 percent to 450.61 million tons and surging domestic demand may result in a gradual rise in domestic steel prices.

Source: Xinhua News Agency - CEIS

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