BUSINESS China steel exports may fall further in 2018: top executive

BUSINESS

China steel exports may fall further in 2018: top executive

Reuters-Global Times

16:09, March 12, 2018

Chinese exports of steel products may continue to fall this year due to strong domestic demand and reductions in capacity caused by environmental commitments, said Li Zigang, chairman of State-owned mill Fujian Sangang Group Co.

That prediction follows a 30.5 percent plunge in Chinese steel exports recorded in 2017 to 75.43 million tons, as strong domestic prices and high profits at home led to a drop in shipments abroad.

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(Photo: VCG)

Supply and demand trends are now more in line following supply-side reforms, "while most of the downstream sectors have shown signs of recovery," Li said on the sidelines of China's annual parliament session on Saturday.

Demand from property, infrastructure, manufacturing and shipbuilding sectors will increase, he said, while steel supply will also see a small pick-up this year compared to 2017.

China, the world's top steel maker, produced 831.73 million tons of crude steel in 2017 and aims to eliminate around 30 million tons of excess capacity as part of its steadfast effort to curb air pollution.

Cities across the country are carrying out stringent measures to lower fine particulate matter (PM2.5) readings. For example, the steelmaking hub of Tangshan in North China's Hebei Province said it will extend production restrictions for another eight months after current curbs expire next week.

Li also said production curbs will not be limited to the smog-prone region of Beijing-Tianjin-Hebei: "Other regions will also see restrictions if pollution levels exceed the limits."

Despite this, steel prices will not see a big fluctuation, he said, as steel mills have already prepared for "the new normal."

Fujian Sangang, the biggest producer in southeastern China, has a total capacity of 11 million tons, producing 11.19 million tons of steel products in 2017 alone.

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