The recently concluded meeting of the Organization for Economic
Cooperation and Development (OECD) demonstrated strong consensus against
massive overcapacity in China at a time when demand is witnessing sharp
declines. The steel trade associations from across the world also raised
serious concerns regarding China’s new steel policy.
Various associations from Asia, the Americas and Europe noted that
the Chinese overcapacity has destabilized global steel market. There has been a
dramatic increase in unfair steel imports, jeopardizing trade flows. Also,
eight steel trade associations representing the US, Canada, Mexico, Latin
America and Europe expressed their concerns about the recently released “Steel
Adjustment Policy” by China. They noted that the policy will hamper global
trade as it follows state-dominated approach to reforming the steel industry.
The OECD Steel Committee called upon each national government to
address the challenges posed by low demand growth and rising imports. It asked
governments to act upon quickly as delay in action would result in survival of
subsidized and state-owned enterprises at the expense of efficient private
enterprises that operate with minimal government support. The joint statement
issued by AISI, SMA, CSPA, SSINA, CPTI, Canacero, Alacero, Eurofer, Turkish
Steel Producer’s Association and the Brazilian Steel Institute emphasized the
need for urgent and effective action in order to generate a level playing field
in global steel market.
The statement alleges that China has not yet proposed any effective
policy to reduce its steel overcapacity. It also called upon individual
government to carefully determine the damages caused by dumped imports from
China before making any decision regarding recognizing China as a market
economy.
Source: metal.com