Chinese steelmakers are seeking new export destinations in Africa and South America as shipments to their biggest overseas buyers in Southeast Asia fall by double digits, with new U.S. trade actions threatening to kill off some markets entirely.
China, the world’s largest maker, consumer and exporter of steel, is finding it has fewer export options. Washington last week imposed hefty tariffs on major steel exporters to the United States – Canada, Mexico and the European Union – prompting retaliatory measures.
The global tariffs Washington kicked off in March were mainly aimed at curbing Chinese steel imports, which U.S. steelmakers also believe are being routed through other countries before landing in the United States.
Last month, the U.S. Commerce Department slapped heavy import duties on steel products from Vietnam it says originated in China, hitting China’s No. 2 export market after South Korea, and a major outlet for sales by Chinese mills that own warehouses in Vietnam.
Vietnam said its steel companies would likely stop buying the metal from China to avoid having their shipments to the United States penalized.
“It is increasingly apparent that export opportunities for Chinese producers are becoming increasingly limited, owing to existing trade legislation, lodged by many parts of the world,” said Chris Jackson, analyst at UK-based steel consultancy MEPS International Ltd.
While China’s steel exports hit an eight-month high in April, shipments for the first four months of the year dropped by 20 percent, although falling only 2.5 percent in value.