China's
steel exports periodically capture the attention of the Western public. While
Chinese steel exports to Europe and the US remain limited, Western narratives
often emphasize external factors as the primary contributors to their
companies' challenges. This perspective may inadvertently distract from the
critical and urgent efforts that are truly necessary to address the underlying
issues facing the industry.
European steelmakers have appealed to trade officials to tackle a surge in
Chinese steel exports that has driven European prices below the cost of
production, the Financial Times reported on Monday.
At a time when China and the EU are still engaged in negotiations regarding
electric vehicles (EVs), this unexpected move by European steel manufacturers
took the market by surprise, sparking concerns about potential shifts in trade
measures.
While it is undeniable that Chinese steel exports have a significant impact on
global pricing and supply chains, the assertion that the rise in Chinese steel
exports has contributed to a decline in European steel prices fails to take
into account the complex and multifaceted challenges facing the European steel industry
itself.
Despite an increase in China's steel exports this year, Southeast Asia and the
Middle East remain the primary markets for Chinese steel products. Chinese
exports of steel to Europe constitute only a minor fraction of the country's
overall steel exports by volume.
In 2023, China's steel exports to the EU reached 3.66 million tons, accounting
for 4 percent of China's total steel exports, according to data from a report
by Chinese industry website mysteel.com in May.
The challenges confronting the European steel industry are not solely
attributable to external competition; rather, they stem from a complex
interplay of internal and external factors.
High production costs in Europe arise from a reliance on imported raw
materials, elevated energy and labor expenses, and stringent environmental and
carbon emission regulations. These elements collectively undermine the cost
competitiveness of European steel products in the global marketplace.
