Japan, China Steel Interests Share Concern on Miners’ Oligopoly

Japanese and Chinese governmental and private steel interests held 17th meeting for steel dialogue on June 30 in Beijing to share concern on potential supply constraint and price increase with severer oligopoly in steel making raw materials. They agreed to notify the concern to antitrust low authority in both countries. They discussed steel market situation and steel trade in Japan and China to share the issue and view in the steel industry.

Japanese delegation included Masaki Koito, director of iron and steel division of Ministry of Economy, Trade and Industry, Shinya Higuchi, Nippon Steel’s managing director, Sadao Ono, JFE Steel’s senior vice president and other executives from major steel makers. Chinese delegation included top of industrial products trade of Ministry of Commerce and officials of major steel makers.

Chinese officials showed concern on oversupply and higher stock impacts on Chinese steel market. They emphasized the government tries to improve the oversupply condition when the supply is much more than the actual demand and explained the policy to close old facilities including shutdown of 30 million tonnes of iron making capacity in 2010.

Chinese officials also explained the government selected the items for termination of value added tax rebate for steel export in energy consumption efficiency and products’ value. They said the government will continue encouraging Chinese steel industry to reduce energy consumption and to shift to higher valued products while the government has no intention for another steel export encouragement action based on the policy for domestic demand driving growth with limited export.

Japanese officials sought Chinese government should terminate antidumping duty on Japanese stainless cold rolled flat steel, which will expire in 2011. Japanese officials explained major change in the stainless situation in past 10 years when Chinese stainless production is now world largest volume while Chinese government keeps antidumping duty for 10 years. Chinese officials answered they will continue the discussion on the issue.