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The latest official data shows that China’s steel production fell 9.5% month-on-month to 82.94 million tons in July, the lowest level since December. In the first seven months of this year, the country produced a total of 613.72 million tons of steel, a year-on-year decrease of 2.2%. However, in the same period, from January to July, steel product exports increased by 21.8% to 61.23 million tons: given that the West has set up trade barriers for some time, the steel river mainly flows to Asian countries, causing widespread anger and increasing blame against Beijing.
Chinese steel exports to the EU are actually down about 10% this year, just as they have been falling for some time to the US. But in Vietnam, for example, they are more than double. However, the impact on prices – strongly bearish – is felt around the world, putting producers around the world in a bind.
ArcelorMittal He recently blamed “aggressive exports driven by Chinese overproduction” for an “unsustainable market situation” that has “seen steel prices in Europe and the United States fall below marginal cost.” Chile’s largest steel producer, CAP, this month announced the indefinite closure of a plant because it “cannot compete with Chinese steel.”
Similar dynamics are being observed in other parts of China’s metallurgical industry. China’s largest zinc producer agreed on Wednesday to reduce concentrate processing by about 1 million tonnes from this year’s forecast to stem losses, Antaike reported.
Chinese copper smelters have also decided to coordinate production cuts in recent months, but a weak domestic market (resulting in prices well below international metal prices) has triggered an uncharacteristic wave of Chinese copper exports, which peaked at 158,000 tonnes in June (flows, still high, fell to around 141,000 tonnes in July).
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