According to industry insiders, China’s steel exports to Australia have fallen by more than 50% in recent months, which is faster than the country’s overall steel exports. This trend will continue as China takes more measures to reduce production and restrict exports. Speed ​​up further.
Analysts pointed out that in the context of the deterioration of bilateral relations, the shrinking steel supply in China may lead to a shortage of steel in the Australian economy, and Australia is about to start a large-scale infrastructure plan.
Declining production and exports will also weaken China’s demand for iron ore, which is Australia’s largest commodity export to China, and some Western media reports indicate that this shows that Beijing cannot “get rid of” this metal.
A steel exporter surnamed Wang in Tangshan City, Hebei Province, northern China, told the Global Times on Tuesday that steel exports to Australia have recently fallen sharply, even though the country is not his main export destination.
“Overall steel exports have halved in recent months, but exports to Australia have fallen the fastest,” Wang said.
An employee surnamed Xie of a Shanghai professional steel materials import and export company told the Global Times on Tuesday that the company’s exports to Australia are small and have been declining because domestic production has been gradually controlled.
Xie pointed out that considering China’s goal of reducing carbon emissions and relatively low steel production costs, there is a high possibility of imposing tariffs on steel exports.
Some trade agencies have stated that they have included a joint responsibility clause for potential steel export tariff increases in new contracts signed with importers.
“As China continues to prioritize domestic supply, we expect that China’s steel exports will impose tariffs again in the second half of the year. Therefore, we clearly stated in the terms that the cost of potential tariff increases should be shared equally by both parties,” an industry insider said. Said.
According to data released by the National Bureau of Statistics on Monday, China’s steel production in July fell to its lowest point in 15 months, thanks to efforts to reduce carbon emissions and rectify the industry to curb soaring prices.
Since the beginning of this year, China has raised the cost of steel exports twice. The Chinese government will resume steel export tariffs and lower ferrous metal import tariffs from May 1. In addition, starting from August 1, China has cancelled the value-added tax rebates for some steel export companies.
Wang Guoqing, research director of the Beijing Lange Steel Information Research Center, told the Global Times on Tuesday: “This will put pressure on the economies of some countries, including Australia, which rely heavily on steel imported from China.”
Lange Steel’s data shows that Australia’s steel imports from China account for 30% of its total steel imports, while Australia only accounts for less than 1% of China’s steel imports.
“As Australia restarts the economy, as more housing and infrastructure construction are launched, the demand for steel will further increase. Coupled with the reduction in imports from China, it will only expand the supply gap, which cannot be filled by other countries. “Wang pointed out.
According to Xie, some steel mills in Vietnam used to export steel to Australia, but they are now closed due to the coronavirus outbreak and other uncertainties.
Analysts also noticed the “domino effect” of the reduced supply of iron ore in Australia, with iron ore shipped to China accounting for more than 60% of the latter’s iron ore imports. Commodities are regarded as the backbone of the Australian economy.
In July, China’s iron ore imports fell 21.4% year-on-year to 88.5 million tons, and customs data showed a fourth consecutive month of decline. Source: Global Times