China produces half the world’s steel, but its economic growth has been reduced to 7%, so that in their own country steel demand decreases significantly.
By having such a moderate (the lowest since 1991) and to avoid having to close down and lay off the millions of people currently working in the sector industrial growth, China maintains a constant steel production and production need to place your own not consume domestic market to other countries, lowering product prices and creating a great imbalance in the market.
In fact, exports grew 63% in January 2015 compared with the same month last year. In tonnes, more than 82 million tonnes, the largest amount of steel exported by a country in the XXI century.
Producing and exporting countries such as America, European Union and South Korea are highly affected cope with this excess supply to price lower than what they have.
In Latin America, steel imports from China increased by 75% and is shaking the prices of large companies. Therefore, countries like the United States this May will appear before Congress to request more tariffs. And they are not alone: South Korea already applied in 2014 to the World Trade Organization increased tariffs on Chinese steel between 18 and 33%.
This May, a meeting of the Organization for Economic Cooperation and Development Steel analyze this issue together with all countries and China, to try to reach a solution.