(Yicai Global) Jan. 17 -- International trade friction and overcapacity reduction measures caused Chinese steel exports to fall in 2016, marking the first drop after rapid growth in the previous six years.
Since the introduction of anti-dumping policies in recent years, only 2.5-3 percent of China's outbound steel has gone to the US, Gladdy Chu, steel analyst at Metal Bulletin told Yicai Global. The government's push to reduce surplus has also impacted exports, an industry analyst said. They totaled 108.43 million tons last year, down 3.5 percent year-on-year, according to China's General Administration of Customs.
Given the momentum of China's "One Belt One Road" initiative, lower taxes and devaluation of the yuan, more than 100 million tons of steel may be shipped off this year, said Wang Guoqing, director at the Glen Steel Information Research Center.
China still has an appetite for raw materials, customs data indicates. Last year, the country imported more iron ore than ever before, over one billion tons, up 7.5 percent year-on-year. Coal imports rose 25 percent year-on-year.
The overcapacity reduction campaign contributed to the increase in iron ore and coal imports. The market consensus is that a shortage of coking coal caused by efforts to cut excess steel manufacturing led to sharp rises in coking coal prices. These increases pushed up iron ore prices, prompting Glencore and other major producers to resume production.
The upturn in coal and iron ore imports as well as growing raw material costs led to increases in steel prices and weakened the price competitiveness of Chinese exports.
Last year, 20 countries, compared to six in 2015, launched 48 anti-dumping investigations into Chinese steel products, representing a 29.7 percent jump in the number of inquiries. These investigations and the resulting tax increases caused a decline in Chinese steel sent to the US. From January to November last year. China exported 1.071 million tons of steel to the US, down 53.3 percent from 2.294 million tons during the same period one year prior.