The China Iron and Steel Association (CISA) has stated during its fourth quarter information conference that China will still face many difficulties and problems in the course of eliminating excess and outdated capacity in the domestic steel industry.
According to the CISA, in the January-September period this year China’s overall crude steel output increased by 0.37 percent year on year. In particular, in the given period crude steel output of CISA member steel enterprises declined by 0.51 percent, while output of non-member steel enterprises rose by 3.57 percent, both year on year. With rises in finished steel prices, some non-member steel enterprises, which had previously shut down production, resumed their activity, exerting pressure on domestic capacity in the steel industry. Meanwhile, as supply of credit from banks to domestic steel enterprises is strictly regulated amid restrictions on credit for enterprises with excess and outdated capacity, some steel enterprises still face financial constraints, as well as issues of staff resettlement and settlement of debts.
As also indicated by the CISA, in the January-September period of the current year, 38 antidumping (AD) and countervailing duty (CVD) cases were initiated against China’s steel product exports, exceeding the overall number of cases initiated against China last year. With the increasing number of antidumping investigations against China, steel exports will face great challenges, which will exert a negative impact on the supply side in China’s domestic steel market. The CISA added that China’s steel industry will face many difficulties and problems and a lot of work still needs to be done against the backdrop of domestic policy to reduce capacity.