World steel production falls 1.9% in June

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PARIS: Led by slumps in Europe and Latin America, world crude steel production fell by 1.9 percent in the first six months of 2016 compared with the same period a year earlier, the World Steel Association (WSA) said on Wednesday (Thursday in Manila).

Overall production dipped to 794.8 million tons, the group said, pointing to a 6.1-percent slide among EU producers and a 13.8-percent slump in South America.

North America, which like Europe has voiced vocal criticism of Chinese dumping, limited its own January-June fall to 0.6 percent, while Asia was off 1.0 percent.

Overall production across June itself was stable at 136 million tons, WSA said, citing figures from the 66 countries that report to it.


China, by far the world’s number one steelmaker with more than half global production and also top consumer, alone churned out 69.5 million tons for a 1.7- percent rise on June 2015.

That figure will only fuel concerns about soaring Chinese imports raised last week by EU Commission head Jean-Claude Juncker, who insisted the bloc would use all possible means to protect its own producers.

China, which makes more than half the world’s steel, is widely accused in Europe of dumping its production on world markets and violating trade agreements at the expense of local jobs.

Juncker said on a visit to Beijing last week that there was a “clear link” between China cutting overcapacity and the EU granting it “market economy status”—a prize Beijing eagerly seeks.

Should the EU grant it such status it would be harder for the bloc to levy anti-dumping tariffs.

Chinese steel exports to the EU rose 28 percent in the first quarter of this year, while prices dropped by more than 30 percent, Juncker cited official statistics as saying.

The EU, which is the second-biggest steel producer, has launched a dumping probe into Chinese steel while the United States has recently introduced tough tariffs against the Asian giant.

China says it will fight those tariffs through the World Trade Organization’s dispute settlement process, according to media reports, adding it wants to reduce overcapacity and cut state-subsidies.

Beijing, seeing slumping demand as economic growth drags, has promised to cut production by a maximum 150 million tons by 2020 on overall capacity estimated at some 1.2 billion tons.

But the plans have stirred concerns with local government officials and state producers worrying about the mass layoffs that would entail.

China last year produced 803.8 million tons of steel, down 2.3 percent on 2014, according to the WSA.

AFP

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