Imports of China steel fall

BY ANDREA HOLECEK, Times of Northwest Indiana
holecek@nwitimes.com

China's steel imports to the United States in October fell 36 percent from the previous month as U.S. domestic demand for steel and steel products continued a free fall.

China accounts for about 40 percent of global production, although it is the world's highest cost producer. China has accounted for roughly 70 percent of the growth in global steel production during the last three years, a growth rate far in excess of the country's domestic consumption, said steel analyst Michelle Applebaum.

China exported 3.6 million net tons of steel to U.S. manufacturers last month compared to 5.6 million net tons in September.

Applebaum's recent Steel Market Intelligence report states that the decline in China's exports reflects not only China's recent moderate production cuts "but more importantly the dearth of demand for Chinese steel from the globe's traditional steel importers in the west."

The Chicago-based analyst contends Chinese steel exports should continue declining as the country closes its older steel producers.

"The current market is providing Beijing a golden opportunity to accelerate the re-engineering of its domestic steel industry," Applebaum's report states. "The industrial marvels of the region, like Baosteel, do not need to see subsidization of these older mills any more than the west needs to see that high-cost steel arrive on our shores."

Despite the monthly drop, Charles Bradford, president of Bradford Research/Soleil Securities, said the Chinese steel product exports in October increased by 9 percent compared to October 2007.

The exports "were higher than had been indicated by Chinese government officials, who had claimed that exports were down sharply," he said.