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The reduction of steel exports of China. What we should expect global markets?

2 July 2017

China suddenly reduced the export capacity of steel metal. Thus, in January — may this year it was reduced by 26%, if we compare its volume with the same period in 2016.

Reuters the experts have done analysis of the actions of China regarding the reduction of steel exports.

In January — may 2017 China eliminated the production of steel capacity 42.4 million tonnes.

In 2016, China was closed 65 million tons of capacity. If you add up these data with the current capacity reduction, you can see that more than 100 million tons capacity is reduced. Beijing promised to close 150 million tons within 5 years.

However, liquidation of the closure is not particularly affected the steel production.

China produced 72,78 million tons of steel metal for April 2017 This number is a new historic record in the production of steel metal. Almost the same amount was made in may 2017 — 72,26 million tonnes.

However, there are signs of the accumulated reserve warehouse of metal rolling. The cost margins for the steel producers is estimated at nearly $ 160 per ton of metal.

Experts wonder as to how much time China will consume such a large amount of steel metal. On the one hand, since the second half of 2017, the construction industry will fall. However, many believe that China will be able to keep their positions. So over the past year, China has been able to maintain the figures of steel production.

However, experts believe that sooner or later production in China will fall. Falling may affect the steel sector. In the future, in the end, will decrease prices, and increase export.

In case of loss of Beijing’s control over the steel industry, the export of the finished product will have a negative impact on the stability of the entire economy of China. This conclusion was made by analysts at Reuters.

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