%Steel prices are declining as China floods the global market with excess product due to weak demand in its home market.
Steel exports from China have soared this year as steelmakers in the nation of 1.4 billion people offload their oversupply.
Domestic demand in China continues to falter amid a pronounced economic slowdown and waning construction activity.
China exported 53 million tonnes of steel in the first six months of this year, a 24% year-over-year increase.
Chinese producers are on track to export a record 110 million tonnes of steel this year, the most since 2015, according to market analysts.
The result is that prices for hot-rolled steel coils throughout Asia have plunged to $510 U.S. per tonne from a peak of $900 U.S. a tonne at the start of the year.
In the U.S., prices for hot-rolled steel coil futures traded on the Chicago Mercantile Exchange have dropped to $660 U.S. per tonne from $1,000 U.S. a tonne at the end of 2023.
The situation is so bad that governments around the world are threatening to launch anti-dumping inquiries and potential duties on Chinese steel products.
The number of anti-dumping investigations involving Chinese steel has risen to 10 so far this year from a total of three probes carried out in 2023, according to industry data.
However, the situation with Chinese steel looks likely to get worse before it gets better.
According to official data from the government in Beijing, Chinese manufacturers are currently sitting on four million tonnes of excess steel in their inventory stockpiles.
Companies in China are increasingly turning to exports to bring those inventory levels lower.
As the world’s largest steel producer, accounting for more than half the world’s 1.89 billion tonnes in 2023, China has an outsized influence on prices and the global market.
China is grappling with a rapidly slowing economy and a debt crisis in its property sector. Consequently, construction activity and demand for steel in the country has plummeted.
