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Global sluggish demand, not China, caused steel glut: MOC

Updated: Apr 19,2016 5:14 PM     Xinhua

BEIJING — The Ministry of Commerce (MOC) on April 19 slammed the accusation that China was to blame for global steel overcapacity, saying that weak global demand and the economic slowdown were the true culprits.

“The bulk of our steel products are consumed domestically. China does not subsidize its products to promote exports,” said MOC spokesperson Shen Danyang at a news conference.

Last week, tens of thousands of German steel workers went on strike over steel products from China, while Indian steel giant Tata’s decision to close mills in Britain saw the media blame China for flooding the market with products at artificially low prices.

“The government has taken action to address steel overcapacity. Notable progress has been made,” said Shen, adding that China will continue to expand domestic consumption of steel products.

China, a major producer, consumer, and trader of steel, shut down outdated facilities with total production capacity of over 90 million tonnes from 2011 to 2015.

In the coming five years, China will continue to reduce crude steel capacity by 100 million to 150 million tonnes.

According to Shen, overcapacity is a problem for all steel-producing countries in the world, and it is a common challenge that needs to be addressed by all countries together.

Officials from nearly 30 countries and international organizations met in Brussels, Belgium, on April 18 to discuss the challenge excess capacity poses to the global steel industry.

“This shared problem needs to be tackled with shared efforts,” said a position paper disseminated by the Chinese delegation during the meeting, adding that it was incorrect to blame international trade for the difficulties.

“Frequent use of trade remedy measures and other import-restrictive measures is not addressing the root cause of global steel overcapacity,” said the paper.

China champions free and open international trade for the steel industry, it noted.

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