As tariff policies in the United States and the European Union (EU) are raising steel trade barriers, China's steel exports appear to have hit an all-time high. It is seen as a strategy to maximize exports before trade barriers rise further.
According to the Korea International Trade Association on the 14th, China's steel export value from January to August this year was about $117.7 billion (about 168 trillion won), up 5.6% from $111.4 billion (about 159 trillion won) in the same period a year earlier. Reuters said September export volume also rose 10% from the previous month to 10.47 million tons (t), the highest in four months. Cumulative exports from January to September this year reached 87.96 million t, the most for this period on record. The full-year export volume is also expected to hit an all-time high.
China is also increasing imports of iron ore, a materials and supplies input. China imported a total of 116.33 million t of iron ore last month, up 10.6% from the previous month. It also rose 11.7% compared with the same period a year earlier.
By region, exports to Africa, the Middle East, Latin America, and Europe increased. Exports to the United States, which imposes a 50% tariff on imported steel, decreased. According to the Korea International Trade Association, through August this year China exported $1.499 billion (about 2 trillion won) worth of steel products to Nigeria, up 52.6% from a year earlier. Exports to Kuwait and Côte d'Ivoire also rose 107.2% and 91.1%, respectively.
Exports to the United States totaled $8.6716 billion, still the largest, but fell 10.3% from a year earlier, and to Korea, China exported $5.89052 billion (about 8 trillion won) worth of steel, down 15.1%. Korea has been imposing an anti-dumping tariff on Chinese heavy plate since Apr.
Global steel demand is expected to be similar to last year or even decline. The World Steel Association forecast this year's global steel demand at 1.75 billion t, similar to last year, and the OECD said global steel demand has declined for three consecutive years.
Industry officials believe China is pushing out as much volume as possible before protectionist measures such as tariffs and the tariff-rate quota (TRQ) take effect. The TRQ is a new system the EU introduced in place of a safeguard (emergency import restriction), limiting steel import quotas (allocations) by country, and is expected to apply around the end of June next year when the existing safeguard measure expires.
An industry source said, "Because Europe's import quota reduction will apply from June next year, exporting countries are in a situation where they must fill and ship before then. China is also pushing hot-rolled products into Korea that have not received an anti-dumping ruling."
Hyundai Steel and Dongkuk Steel Mill recently asked the Ministry of Economy and Finance to extend the anti-dumping tariff on Chinese H-beams. Koo Ki-bo, a professor in the Department of International Trade at Soongsil University, said, "Because China produces more than 50% of the world's steel, even a small oversupply has a very large impact from the perspective of competing countries. Korea also needs to share information with the EU and others to respond."