CISA Warns of Grim Export Prospects

The China Iron and Steel Association (CISA) has predicted a bleak external environment for the domestic steel industry that has been reeling from the high cost of iron ore. An additional 15 million tons of steel capacity will emerge in South Korea alone this year, which is bound to vie with China for its traditional customers in Indian, South Korea and ASEAN nations whose combined consumption of Chinese-origin steel products last year accounted for 48.2 percent of total steel exports out of China.

The recent strengthening of the yuan against the U.S. dollar and the yen, China's continued efforts to contain export activity by high energy consuming, high polluting and resources-intensive sectors, and global trade protectionism, all have stood out as a hurdle to the steel export industry, further dampening steel mills' ability to re-balance supply with demand at home. Without any relief of cost pressures in sight, domestic steelmakers will continue to follow the depressing orbit of high cost, high price and low profitability .