Western steel cos blame China for global overcapacity crisis

Several leading western steel manufacturers today alleged that China is the predominant global contributor to the problem of overcapacity that the world is currently facing.
"The global steel industry is currently suffering from a crisis of overcapacity and the Chinese steel industry is the predominant global contributor to this problem," a group of nine US steel industry associations said in a statement.
"Estimates from the OECD Steel Committee indicate that there is almost 700 million metric tons of excess steel capacity globally today," the statement said.
China's overwhelmingly state-owned and state-supported steel industry has an overcapacity ranging from 336 to 425 million metric tons and it is expected to grow in the coming years.

"This situation, together with a declining steel consumption, has resulted in record levels of steel exports from China to the rest of the world in 2014 - and which are on track to exceed 100 million metric tons this year," the statement said.
The organisations include American Iron and Steel Institute, Steel Manufacturers Association, Canadian Steel Producers Association, CANACERO (Mexican steel association), Alacero (Latin American steel association), EUROFER (European steel association,) Instituto AcoBrasil (Brazil Steel Institute), Speciality Steel Industry of North America, and the Committee on Pipe and Tube Imports.

"China has claimed that it should be automatically accorded treatment as if it were a market economy after the 15th anniversary of its accession to the World Trade Organisation (WTO) in December 2016. We disagree," the steel makers said.

It is the view of steel producers in Europe and North and South America that China's Protocol of Accession to the WTO does not automatically require governments to treat imports from China as if they were from a market economy country as of December 2016, they said.
Some provisions allow WTO members to treat China as a non-market economy country unless the government of China or Chinese producers can show that they operate under market economy conditions, the steel industry said.
"Given the continuing significant role of the Chinese government in many key aspects of the Chinese economy, and especially in its state-owned and -controlled steel sector, there can be no question that China remains very much a non-market economy today," they said.

"For the steel sector, recognition or treatment of China as a market economy at the end of 2016 would coincide with the peak of Chinese excess steelmaking capacity, and record level of exports to international markets, including the US, the EU, and Latin America," the statement said.