China?s steel exports climbed to the highest level since January, adding to a surplus that?s hurting global producers and prompting trade disputes worldwide.
Mills in China are facing slower domestic demand for the first time in a generation. They?re boosting exports, raising competition and pushing down prices. China produces half the world?s steel and exports are similar to output in Japan, the second-biggest producer. The industry is ?bleeding to death,? Gary Klesch, chairman of Klesch Group, said on Aug. 4 after pulling out of talks to buy a Tata Steel Ltd. U.K. business.
Global steelmakers are battling lower earnings as prices slump. Nippon Steel & Sumitomo Metal Corp., Asia?s biggest producer, forecast the first drop in full-year earnings in three years last month, while U.S. Steel Corp. posted a quarterly loss. South Korea?s Posco reported a profit slump and announced plans to cut staff and refocus on its main business.
There were eight trade probes on Chinese steel products in the first half, while a further five were added in July, according the China Iron & Steel Association.
ArcelorMittal South Africa Ltd., a unit of the world?s biggest producer, said last month it was going to fight steel from China, which is being sent to the country?s ports at prices as much as 25 percent below local output costs, and asked the government to impose tariffs.
