China's metals output stays ahead of consumption

By Staff -- Purchasing, 5/3/2007

China's exports of carbon and alloy steel mill products into North America and other industrialized regions will continue strong this year, despite complaints to the World Trade Organization from such nations as the U.S. about the growth in tonnage in recent years.

The China Iron and Steel Association now believes the country's steel consumption growth rate could drop by 10–13% in 2007 down from 398.05 million metric tons in 2006. But that still will be 16% higher than in 2005 because of export demand for sheet, plate and bar products, according to a report by the Interfax China Commodities Daily English-language news service.

China's National Development and Reform Commission (NDRC) predicts that steel production could increase 10% to 462 million metric tons this year, up from the 419 million metric tons of steel in 2006—which itself was up 18.5% from 2005. And that probably will boost exports again this year—which is hindering the planned elimination of outdated production capacity. China's net exports of steel products amounted to 24.5 million metric tons, netting sales of $6.4 billion.

NDRC says the slowdown in capacity cutbacks has been caused by a combination of world growth in demand for commodity steel grades and home-market demand growth for such products as cold-rolled sheet, electric steel and stainless steel plate.