On January 26, the
China Iron and Steel Association (CISA) outlined reasons for its lack of optimism on the prospects for Chinese steel exports in 2011.
According to the analysis of the CISA, in 2010
China's exports of finished steel to South Korea, India, and ASEAN countries accounted for 48.2 percent of its total finished steel exports. However, since global steel production is indicating strong growth (e.g., in South Korea, 15 million mt of new crude steel output capacity is expected to come on stream in 2011),
China's steel exports will be negatively affected. In addition, impacted by the relatively loose monetary policies introduced by the US and Japan, the Chinese currency has appreciated further, making it more difficult for Chinese steel enterprises to export. Furthermore, Chinese national policy aims to restrict exports resource-based products which involve high levels of energy consumption and pollution. International trade protectionism is expected to pose an additional barrier in the way of Chinese steel exports in 2011.
Meanwhile, the CISA pointed out that the US dollar has continued to depreciate, while international prices of crude oil, iron ore, coking coal, scrap, etc., have increased significantly and so steel enterprises face enormous cost pressure. The CISA concluded by saying that
China's iron and steel industry would be characterized by high costs, high prices and low margins in 2011.