Japan Steel Interests Urges CISA on Higher Steel Export

Japan Iron and Steel Federation issued a paper to notice concern for higher steel import from China to China Iron and Steel Association. JISF will discuss that again at meeting between Japan and China government and private sector in Beijing at end of October. Chinese steel industry expands the output capacity at pace more than growth of domestic consumption. China turned into net exporter in the year expanding the net export volume to more than 2 million tonnes per month. To Japanese steel industry, import from China increased for wire rod products and Chinese overcapacity started to impact on steel supply of Asian market. Japanese steel import from China decreased by 37% to more than 336,000 tonnes in January-July from same period of 2005. The import for shapes, bar and wire rod increased while flat steel import from China dropped widely. Especially, wire rod import from China impacts heavily on Japanese steel market when the domestic market is as small as annual 1.9 million tonnes. The import represented 14% of total domestic market in fiscal 2005 ending March 2006. China represented more than 80% of the import. The import ratio is expected to increase when Japanese wire rod import from China increased by 39% in January-July. Chinese steel products export increased by 57.7% to 20.67 million tonnes in January-July from same period of 2005. The export reached annualized 35 million tonnes and the net export is to reach near 17 million tonnes in the year compared with 5.3 million tonnes of net export for the country in 2005. The steel products’ supply for other than China will increase by 23 million tonnes in the year from 5.3 million tonnes of net import. With higher Chinese steel export, USA’s steel import surged to record level and US steel industry increased the concern for higher import. Chinese official also concerns about trade conflict. The government reduced tax rebate for steel products’ export from current 11% to 8% last week to save steel export. The government tries to avoid trade conflictions with other country while the tax rebate cut is small step to decrease Chinese steel export.