China steelmakers attack U.S tariff move; say need more time
Reuters
Published May 19, 2016 04:12AM ET
China steelmakers attack U.S tariff move; say need more time
By Manolo Serapio Jr and Florence Tan
SINGAPORE (Reuters) - Chinese steelmakers attacked new U.S. import duties on the country's steel products as "trade protectionism" on Thursday, saying the world's biggest producer needs time to address its excess capacity.
"There's too much trade friction and it's not good for the market," Liu Zhenjiang, secretary general of the China Iron and Steel Association told Reuters when asked if China will appeal U.S. anti-dumping duties at the World Trade Organization.
China said it will continue its tax rebates to steel exporters to support the sector's painful restructuring after the United States said on Tuesday it would impose duties of more than 500 percent on Chinese cold-rolled flat steel.
China, which accounts for half the world's steel output, is under fire after its exports hit a record 112 million tonnes last year, with rivals claiming that Chinese steelmakers have been undercutting them in their home markets.
In the four months to April, China's steel exports have risen nearly 7.6 percent to 36.9 million tonnes.
"It's not just China's problem to tackle overcapacity. Everyone should play a part. China needs time," Liu told an industry conference.
"Trade protectionism hurts consumers, (it's) against free trade and competition," he added.
China's Commerce Ministry said on Wednesday the United States had employed "unfair methods" during an anti-dumping investigation into Chinese cold-rolled steel products.
While a flood of cheap Chinese steel has been blamed for putting some overseas producers out of business, China denies its mills have been dumping their products on foreign markets, stressing that local steelmakers are more efficient and enjoy far lower costs than their international counterparts.
"High taxes are unfair .... China doesn't have a large market share in the United States," Zhang Dianbo, deputy general manager at Baosteel Group, told the Singapore conference.
The anti-dumping duties were a "protectionist measure", Bi Zhichao, president of Shandong Iron & Steel Co told Reuters, adding that the Chinese government does not provide incentives to promote exports.
"Export volume depends on global demand," said the steel producer which sells about 7-10 percent of its output overseas.
A surge in Chinese steel prices helped restart once-shut mills, and might slow Beijing's bid to address excess capacity, said Baosteel's Zhang.
"The price rebound is not beneficial to the overcapacity situation.... It will delay the shutdown of (inefficient) capacity," he said.
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Steel prices have come off around a quarter since their April peaks and could weaken further in the second half of the year, but Zhang said they were unlikely to return to recent lows.
A surge in Chinese steel prices had been fueled by a pick-up in seasonal demand at a time when product inventories are low following mill shutdowns, he said.
Bi said some plants have delayed maintenance while others increased utilization rates but there were fewer furnaces that restarted.
"Prices were good in April and by raising output we can lower our production costs," he said. Shandong Iron & Steel increased its output by 6 percent or about 60,000 tonnes a month.
Written By: Reuters
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