The Breakthrough of China's Iron and Steel Industry

The European and American trade protectionism against China in the field of steel products has recently been upgraded again. First, the EU Council of Ministers issued an announcement on October 6 stating that China’s loss of European seamless steel tubes poses a threat to the EU’s industry and decided to impose 17.7% to 39.2% The final anti-dumping duties; subsequently, the U.S. Department of Commerce announced on October 7 that it will launch anti-dumping and countervailing duty investigations on seamless steel tubes imported from China. The US company that initiated the investigation request to impose a 98.37% anti-dumping tax on seamless steel pipes imported from China and imposed additional countervailing duties on the Chinese government's subsidies, which may result in the United States setting new tariffs on such products.

The European Union’s rulings will have a certain demonstration effect on the ongoing investigations and final rulings in the United States that cannot be ignored. From the perspective of the international environment, China’s steel industry has actually fallen into the double encirclement of international trade protectionism and resource trade monopolies.

When a lot of thinking is still immersed in the data of China's steel exports in the world last year, I do not know that this data has already become history in the first half of this year. According to ISSB, the British steel statistics agency, in the second quarter of 2009, for the first time since the fourth quarter of 2005, China became a net importer of steel and there was a deficit in steel imports and exports. In the structural proportion of China's steel products exports dropped sharply, major export destinations have plummeted: In the first half of 2009, China’s steel products exported to the European Union decreased by 81%, exports to Asian markets decreased by 75%, and exports to the Middle East decreased by 68%. Exports to the United States, Canada and Mexico have also been reduced by more than 51%. With the acceleration of trade protection actions in relevant regions, the pattern of weak exports of Chinese steel products will continue in the short term.

In addition to the downstream containment of trade protectionism, the trade monopoly in the resource sector is also carrying out a draught-type upstream strangling, and the unfavorable factors such as high international iron ore prices have unreasonable industrial structure, excess capacity, and cost management that do not have international China's iron and steel production companies, such as comparative advantages, will inevitably cause huge impacts. Although 71 large and medium-sized iron and steel enterprises in China have made profits for the first time in June this year after losing for 8 consecutive months, this is directly related to limited production insured prices and a rebound in steel prices. In this regard, the picking-up of Xiaoyangchun still faces three challenges: First, the international monopoly pattern of iron ore prices has not changed; the initiative for iron ore price negotiation in the next few years is still difficult; second, the price of imported crude steel is lower The phenomenon of export prices shows that the original price competitiveness advantage of Chinese steel companies has been lost under multiple unfavorable factors; Third, domestic and international steel demand has benefited from the economic stimulus plan, but whether this demand is sustainable is still acceptable. The test of actual economic trends.

It can thus be seen that when the Chinese steel industry encounters a double encirclement of international trade protectionism and the monopoly of raw material resources prices, internal training and structural adjustment are the only ways to break through.

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