Steel Industry Archives - Economy Watch

Is the Latest Steel Crisis China’s Doing?

Today, advanced economies blame China for steel overcapacity. In reality, four decades ago Washington and Brussels opted for bad policies, which China seeks to transcend.

In the G20 summit in Hangzhou, some world leaders had harsh words for China’s steel overcapacity. Before the summit, President Barack Obama was urged by US lawmakers, unions and trade associations to blame China’s trade practices for US mill closures and unemployment and to stress the need for “aggressive enforcement of US trade remedy laws.”

The Other Steeltown…in China

China’s steelmaking capacity has expanded rapidly since the beginning of the 21st century. The scale of this expansion is unprecedented in the history of industrialisation in Europe, North America and East Asia.

China’s annual production of crude steel reached 804 million tonnes in 2015, 6.3 times higher than the total production in 2000. It accounts for nearly 50 percent of total global steel output, a jump from only 15 percent at the end of the previous century.

British Steel: Tata For Now

Tata Steel is planning to sell its UK business after the company’s board unanimously concluded that saving its plants in the country was simply not affordable. A statement released by Tata read:

The Steel Industry Offers a Fantastic Macro-economic View

Few industries offer a picture glass window to see numerous macroeconomic forces as steel does. Excess capacity, trade policy, and the yuan all intersect when looking at the steel industry. Moreover, it also shed light on why the drop of energy and other commodity prices, such as iron ore, have not bolstered the steel industry, let alone the general economy, as many expected.

British Steel Appears on its Way Out

The announcement of over 1000 job losses at Tata Steel – the vast majority at the Port Talbot plant in South Wales – has understandably provoked heated debate. Yet this is just the latest incident in the industry’s spiral of decline, which has recently seen redundancy plans made at other companies including SSI, Caparo and Sheffield Forgemasters. The future of the industry in Wales, and other regions across the UK, is in jeopardy. In addition, there has been no shortage of suggestions as to what could, or should, be done.

There are three big questions here.

Without Government Support, the UK’s Steel Industry Will Continue to Fade Away

Despite cries of foul play, it should not come as a surprise to anyone that the UK steel industry has lost its edge – it was actually lost a while ago. The official line – low prices and a global glut brought on by excess Chinese supply and low demand – is true to some extent. However, it tells only part of the story.

EU Files WTO Complaint Over China Steel Dispute

The European Union has filed an official complaint against China’s imposition of anti-dumping duties on steel imports, said the World Trade Organisation on Thursday, in the latest of a series of bilateral disputes that has sparked fears of a trade war breaking out.

The complaint, six months after Japan filed a similar case, centres on high-quality steel products that China needs to build new power plants and is crucial for its plans to upgrade and clean up its electricity infrastructure.

World’s Largest Steelmaker Calls for EU Trade War with China

Lakshimi Mittal, owner of the world’s largest steelmaker ArcelorMittal, has urged Europe to erect trade barriers to protect its manufacturers, claiming the future of the European Union manufacturing depended on politicians helping the industry face what he said was unfair competition from China, reported the Financial Times on Sunday.

Speaking to the Financial Times, Mittal accused Chinese producers of overproducing despite weak market demand, lowering the price of the metal globally.

Category: Steel Industry