China’s massive steel-making industry is flooding the world with exports, prompting steel producers around the world to seek government protection from falling prices, the Wall Street Journal reported.
The oversupply is fueling conflicts with trade partners, including the European Union, South Korea and India, the newspaper said.
It has triggered a wave of layoffs in the United States, the world’s second-biggest steel consumer. American steel producers such as US Steel Corp. and Nucor Corp. are seeking political support for anti-dumping tariffs on Chinese imports.
China’s steel exports rose 63 percent to 9.2 million tons in January from a year earlier.
In 2014, the country exported 82.1 million tons, up 59 percent from the previous year and the biggest volume of steel exported by any country this century, the report said. But this year’s exports could easily surpass that, it added.
China produces as much steel as the rest of the world combined—more than four times the peak US production in the 1970s.
But as China’s economic growth slows, its excess steel output is finding its way overseas.
Steel use in China rose by just 1 percent last year and the growth is expected to slow further to 0.8 percent in 2015, according to the World Steel Association, amid a slump in the country’s property market.
However, Chinese mills have yet to slow down in their production, which is supported by a fall in the price of iron ore, the main ingredient in making steel.
The state-backed China Iron and Steel Association, which used to consider other countries’ bid to slow down Chinese exports as “protectionist”, now acknowledges the need to tame its production amid the oversupply, the newspaper said.
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