Price-cutting in steel industry blamed on China

ALAN PEAT
NOT ONLY accused of flooding the world market with “cheap” textiles and clothing products, China now stands before plaintiffs in the international steel industry accusing it of threatening a price war. The IISI, a grouping of the world’s biggest steel-making firms, has very few Chinese producers in its ranks, according to a Reuters report, and is concerned about what it terms China’s “overproduction”. At the same time, it has warned members not to enter a price-cutting regime with the Chinese industry. The previously mighty, but now ailing, US steelmaking industry has already called on the Bush administration to stem the flow of Chinese imports – which are frequent targets for anti-dumping actions. The latest figures show that steel output in that country has soared in the last decade. China now generates more than a third of total world production, and its world dominance is threatening the rather fragile pricing structure of the rest of the global manufacturers. Official Chinese statistics show that steel product exports in the first seven months of the year reached 20.67-million tonnes, up 58% on the same period last year, while imports dropped 29%. A major fear is that the major consumers of steel products, internally in China and in India, will remain at the top of the buying log, but that demand will slow in the medium- and long-term. This, according to the steelmakers body, will put more export product out into the general world market – and possibly see prices cut even further.