Serious global steel overcapacity

Currently, the global steel overcapacity is long-term structural problems, not the market a cyclical problem, steel industry leaders need strong initiatives to reduce excess capacity, otherwise the steel industry can’t be reborn.

Morgan Stanley’s research data shows that global excess steel production capacity is estimated 334 million tons, of which China about 200 million tons of excess. The next five years, the world’s steel production is likely to increase by about 3%, which means that no action is taken, overcapacity situation will continue to exist. The traditional method of solving overcapacity is business combination, but there are not enough healthy steel companies willing to mergers and acquisitions unhealthy business. Overcapacity in China is a difficult problem.

 

Various countries steel market price is unknown China steel with large trade deficit

Data show that currently only U.S. steel mills raise prices slightly, other countries such as Japan, China steel product prices mostly fell or keep fair, however, there are many differences over the price.

Automotive industry what use more steel products in the U.S., India, Southeast Asia, China and other places is also good. Currently performance of Europe depot is poor, mainly because most of European depot to set up factories in emerging countries, but there is no feedback to home country after profit.

Public construction sector in various countries, the development of infrastructure in Indonesia is relatively good, Indonesian steel industry is not strong, causing Asian steel makers to actively seize the market. Professionals believe that China’s public building strength is not enough, and the urbanization policy should be more explicit, in addition to its urbanization rate should be increased from the current 52% to 70%, the rest supporting building measures have to be more explicit so can estimate the impact on the steel market.

China is the world’s major steel-producing countries, but because of steel production structure is irrational, but also it is the world’s major steel importer. China steel imports are far more than exports in recent years. In 2000, for example, China’s steel product exports achieved 3.047 billion U.S. dollars, while imports amounted to $ 9.56 billion, the trade deficit amounted to $ 6.513 billion.

Our main trading partners in Iron and steel products, Japan, South Korea and the EU is China’s high-value-added steel major importing countries, CIS countries are our major importer of ordinary steel, Southeast Asian countries, the EU and the U.S. are major exporters of steel products.

 

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