China looks to end year as net steel importer

China looks to end year as net steel importer

Tax rebate changes and low international prices may prevent China from becoming a net steel exporter this year, argues Wu Xichun, former chairman of the China Iron and Steel Association (CISA). Wu Xichun predicts that China's steel product exports will stay under 20 million tons this year. Figuring that China will produce 344 million tons of raw steel this year, the country will have to import 26 million tons to meet expected demand of 350 million tons of steel. Lower exports turned China into a net importer of steel products and semi-finished products in July 2005, reversing 10 straight months as a net exporter. China imported 15.35 million tons of steel products through January-July 2005 and exported 13.1 million tons. In 2004, the country imported 29.3 million tons of steel products and exported 14.2 million tons. China's rising domestic capacity has displaced some imports and undermined global steel prices. To compensate, leading global steel giants like Europe's Arcelor and South Korea's POSCO have cut output and steel worker unions in the US have sought anti-dumping protection.