Several stories this morning
China steel estimates surge, surplus seen
China will produce far more steel in 2005 than previously forecast, generating an unexpected surplus almost as big as the national capacity of Germany, estimates from a top agency showed on Wednesday.
Slowing growth in domestic steel demand, mainly from the property sector, was responsible, said the State Council Development Research Center, the cabinet’s think-tank, spelling bad news for global steel makers dreading a tide of Chinese exports.
But the surplus is not going abroad just yet. Exports and imports would be about balanced, the think-tank said.
What are they doing about it?
China Announces New Tax on Steel Exports
Well, actually they are re-introducing a tax they had 7 years ago.
AP via Yahoo! Finance
China will impose a tax on some steel exports to slow their surging growth, the government said Wednesday, amid growing concern overseas that a deluge of low-priced Chinese steel will flood the market.
The 17 percent tax on high-end products will take effect Friday, the State Administration of Taxation said on its Web site. The step is a reintroduction of a tax that was repealed in 1998 in order to help Chinese steel producers compete in world markets.
A cut in steel production could help to reduce Chinese energy use and pollution by the steel industry, the statement said.
The decision follows China’s recent agreement with the European Union to restrain the growth of textile exports amid complaints that low-priced Chinese products are hurting European, U.S. and other competitors.
I scanned a number of articles on this topic, and I can’t find a definition of “high-end steel”. Is that tool steel? Stainless Steel? High Carbon Spring Steel? Anyone know? Use the comment link at the bottom of the article if you have found an answer to this riddle.
And more plant shutdowns
Mittal Steel cuts output by 1 mln tonnes in Q3
Mittal’s plans follow similar moves by other European steel makers, who last week announced production cuts for the third quarter in the face of sagging demand and high import costs due to the strong euro.
The production cutbacks will be equally split between Mittal’s North American operations and those in Europe and elsewhere in the world.
“The production cutbacks that we have announced today will help to reduce the inventory build up that we currently have and help to restore equilibrium to the global supply and demand equation,” [Lakshmi Mittal] said.