China and other major steel-producing countries failed on Monday to agree on measures to tackle a global crisis in the industry as it suffers from overcapacity, Reuters reported.
A meeting of ministers and trade officials from over 30 countries, hosted by Belgium and the OECD, sought to tackle excess capacity, but concluded only that it has to be dealt with in a swift and structural way, the report said.
Global steelmaking capacity was 2.37 billion tonnes in 2015, but declining production meant that only 67.5 percent of that was being used, down from 70.9 percent in 2014, according to the OECD.
China’s assistant commerce minister, Zhang Ji, countered accusations that Beijing subsidizes steel exporters, saying that his nation had cut 90 million tons of capacity and that it plans to reduce it by a further 100-150 million tons.
China says the fundamental cause of steel overcapacity was the collapse of demand due to the 2008-2009 financial crisis and that the issue of excess capacity is a global one for all countries.
International trade is not to blame, it says.
However, deputy US trade representative Robert Holleyman said Zhang’s talk of steel export subsidies missed the point.
“What we are talking about are subsidies that encourage steel capacity or that sustain loss-making enterprises or plants,” he said, adding that a “critical mass of economies” needed to agree additional steps.
Cecelia Malmstrom, the EU’s trade commissioner, said governments should not grant subsidies that keep unviable plants running.
Also, state-controlled firms should be subject to the same rules as the private sector, she said.
– Contact us at [email protected]