The flood of cheap steel exports from China that’s hurt prices and damaged mills’ profits around the world will probably peak this year as producers step up complaints, according to the South East Asia Iron & Steel Institute, as figures on Tuesday showed record shipments last month.
More than 20 trade cases have been lodged against China’s cargoes, with about seven from Southeast Asia, Chairman Roberto Cola said in an interview. Efforts within China to stem local steel output to protect the environment may also help curb overseas sales, said Cola, who spent more than three decades in the industry. Mills in the world’s largest producer have shipped unprecedented volumes this year as demand slowed at home. While the exports have acted as a safety valve for Chinese mills, enabling them to sustain production, they’ve spurred a surge in trade tensions from Asia to the US amid complaints the exports are unfair. Mills in Southeast Asia are now running at less than 50 percent of capacity, according to Cola.
“There’s around 300 million tons of excess capacity in China, that’s the problem, so they’re forced to export,” Cola said by phone from Manila on Monday. There’s “a lot of protest from a lot of other countries.”
Cargoes from China jumped 16 percent to 11.25 million metric tons in September from August, the customs data showed. Imports by Southeast Asia—which groups economies including Indonesia, Thailand, the Philippines and Singapore—will probably increase to about 33 million or 34 million tons this year from 23 million in 2014, according to Cola.
The group that Cola chairs was founded 44 years ago and represents mills from Southeast Asia. With a secretariat based in Shah Alam, Malaysia, its role is to promote the iron and steel industry across the region, liaising with producers in Australia, Japan, South Korea and Taiwan.