SYDNEY: Canberra and Washington will step up joint efforts to protect domestic steelmakers, Australian Prime Minister Malcolm Turnbull said on Thursday, amid concerns about China flooding the market with below-cost products.
Turnbull made the remarks after a phone call with US President Barack Obama early Thursday.
Steelmakers in both countries are under pressure amid low prices of the alloy—a result of a supply glut and falling demand in China as its economy softens.
“The president and I have agreed that Australia and the US will intensify our collaboration to ensure that the overproduction of steel is addressed,” Turnbull told reporters in Melbourne.
“I’ve also raised this issue, I should say, with the Chinese leaders, in particular with Premier Li [Keqiang], who undertook and has committed publicly as well to reducing China’s steel production by 150 million tons a year.”
China is the world’s largest steel producer and accounts for half of global production, with its manufacturers pumping out hundreds of millions of tons more each year than they need domestically amid the economic slowdown.
The supply glut has hurt steel-producing nations and led to plant closures and job losses.
In Australia, cash-strapped miner and steelmaking giant Arrium—which operates in 15 countries with 8,350 employees—was placed into voluntary administration in early April.
Canberra has introduced new anti-dumping decisions to support the local steel industry and is also set to hold a government inquiry into steel dumping.
“We need to address this issue because it is important that the viability of steelmakers in our country, and in the US and other nations, is preserved and not undermined by the exporting or the dumping of very cheap steel made in places where it is being produced at way below the real cost,” Turnbull added.
Chinese officials contend that overcapacity in its steel sector is a result of cyclical change in the economy, and that they are striving to shrink the sector.