Iron and steel as­so­ci­a­tion re­jects global blame for glut

China Daily (Canada) - - LIFE - By ZHONG­NAN zhong­nan@chi­nadaily.com.cn

The China Iron and Steel In­dus­try As­so­ci­a­tion has re­jected in­ter­na­tional in­dus­try claims that a global glut in sup­plies is the direct re­sult of ro­bust growth in Chi­nese steel ex­ports.

Wang Liqun, the CISA’s vicechair­man, said it strongly dis­agreed with a joint state­ment by nine for­eign coun­ter­parts that claimed the Chi­nese steel in­dus­try “is the pre­dom­i­nant global con­trib­u­tor” to the world’s steel in­dus­try suf­fer­ing “a cri­sis of over­ca­pac­ity”.

The ri­val as­so­ci­a­tions — from coun­tries in­clud­ing the United States, Canada and Brazil — re­leased the state­ment ear­lier this month, ex­press­ing op­po­si­tion to China’s on­go­ing trade prac­tices and claim­ing they had con­tra­vened World Trade Or­ga­ni­za­tion rules.

In a state­ment on Wed­nes­day, Wang said China’s steel in­dus­try has be­come a vic­tim of trade pro­tec­tion­ism.

He said the in­ter­na­tional in­dus­try’s col­lec­tive be­hav­ior amounted to un­nec­es­sary steel in­dus­try con­flict, and that the state­ment was ac­tu­ally be­yond the nor­mal re­mits of such as­so­ci­a­tions, re­gard­less of the fact the sec­tor had en­tered what must be con­sid­ered one of the most com­pet­i­tive pe­ri­ods in its history.

“To sim­ply at­tribute the dif­fi­cul­ties in one coun­try or re­gion to Chi­nese en­ter­prises is ir­re­spon­si­ble,” saidWang.

“It does not solve the dif­fi­cul­ties fac­ing the in­dus­try and does lit­tle to pro­mote the healthy de­vel­op­ment of the global steel mar­ket.”

He said the nine as­so­ci­a­tions also pub­lished what he de­scribed as a per­func­tory state­ment with­out any prior com­mu­ni­ca­tion with China.

The CISA’s stance, he said, was that while over­ca­pac­ity re­mains a com­mon is­sue glob­ally, so­lu­tions re­quire con­certed ef­forts by all par­ties work­ing to­gether.

Over the past decade, the Chi­nese gov­ern­ment and the coun­try’s steel en­ter­prises have at­tempted var­i­ous mea­sures to re­solve its own in­dus­try over­ca­pac­ity.

Ob­so­lete fa­cil­i­ties have been shut down, which at the same time has helped tackle on­go­ing en­vi­ron­men­tal pro­tec­tion is­sues.

In­dus­try fig­ures showed that 77.8 mil­lion met­ric tons of crude steel ca­pac­ity have been cut na­tion­ally since 2011, with more ex­pected.

China ex­ported 93.87 mil­lion tons of steel last year, a 46 per­cent rise, and the CISA has pre­dicted the fig­ure will ex­ceed year.

But based on mar­ket de­mand, the Chi­nese steel mills cut out­put by 2.23 per­cent on a year-on-year ba­sis from Jan­uary to Oc­to­ber, which rep­re­sented a re­duc­tion of more than 15 mil­lion tons.

CISA’s Sec­re­tary-Gen­eral Liu Zhen­jiang ac­cepted that ris­ing Chi­nese steel ex­ports this year have af­fected cer­tain mar­kets, but said out­put ad­just­ments had been made.

“It can­not be de­nied the coun­try’s in­creased ex­ports have driven mar­ket forces,” said Liu.

“But Chi­nese steel prod­ucts have con­tin­ued to be pop­u­lar in ex­port des­ti­na­tions be­cause they are com­pet­i­tively priced.”

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