China slams global steel industry for blaming it for overcapacity, lower steel prices

China has denied charges it alone is to be blamed for an overcapacity crisis in the global steel sector and said it cannot be the excuse for European Union to deny the world’s second biggest economy the market economy status it is entitled to.

Reacting to a statement by steel associations from the United States that the Chinese steel was the predominant global contributor to the problem, the China Iron and Steel Association (CISA) said overcapacity was a common issue in the global steel industry restructuring, and required concerted efforts of all the parties in the global steel industry.

“To simply attribute the difficulties in one country or region to the Chinese enterprises is not responsible, nor is beneficial for solving the industry difficulties in their own country or region and promoting the smooth development of the global steel industry,” it said in the statement.

Cheap Chinese imports have hit domestic producers hard in Europe, United States and India, all of which have slapped anti-dumping duties on Chinese steel products in an attempt to safeguard local producers.

Steel makers in Europe have said that according China a market economy status promised to Beijing hen it joined the World Trade Organization (WTO) will lead to labour layoffs and closure of local mills.

CISA said the Chinese government and the steel industry have taken measures to resolve overcapacity, and the results were there for everyone to see.

Since 2011, China has actively eliminated obsolete capacities, and reinforced energy saving and environmental protection, it said, adding that 77.8 million tons of crude steel capacities have been eliminated and more efforts will be made to reduce capacities.

“At the same time, Chinese steel mills have actively cut their production in accordance with the market demand. From January to October 2015, Chinese crude steel output has declined by 2.23 percent y-o-y, a reduction of more than 15 million tons.”

CISA admitted that resolving overcapacity was a long-term process and that the US and European countries had spent more than a decade to address the issue in the 1970s. “China will take a certain period of time to do so as well. Chinese steel mills will learn the successful practices and experience from their counterparts in the US and European countries, to accelerate the process of resolving overcapacity,” it said.

“We have noted that the increasing Chinese steel exports this year have brought about some impacts on some countries and regions, and we have tried to make some adjustments. However, it cannot be denied that the increasing exports are mainly due to the market forces and competitiveness and Chinese steel products are popular in the export destinations, bringing about benefits for many consumers,” CISA said.



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