China’s steel exports plummeted for the fourth straight month in November, showing that supplies from the world’s largest producer were wilting under a barrage of trade measures by other countries.

Its exports of steel products in November dropped 16% compared with a year ago to 8.12 million tons, according to Chinese trade data released Thursday. Exports from January to November fell 1% on year to 100.68 million tons.

China, which accounts for around half the world’s steel output, has been flooding markets overseas with cheap steel as domestic demand has slowed. The U.S., Europe, India and other countries have imposed trade measures to stem inflows of Chinese steel to protect local producers.

This year, the U.S. imposed new tariffs, as high as 266%, on Chinese steel. China vigorously denies the dumping claims, but leaders of its steel industry pledged to cut back capacity last year amid the outcry.

“These measures are still in place. It’s unlikely that other countries are going to remove the  measures anytime soon,” said Rajiv Biswas chief Asia-Pacific economist for IHS. “Chinese steel exports will continue to face pressure.”

A boom in China’s housing sales this year has alleviated some of the demand pressures on its steel industry, but its sales are likely to slow next year, with about 20 Chinese cities tightening loans and sales to check speculative buyers. Around 15% of China’s steel demand comes from housing.

The combination of falling exports and slower housing demand is likely to lower steel prices in China and erode margins of its steel mills, which had returned to profitability this year, Mr. Biswas said. China’s steel industry had a combined loss of 64.5 billion yuan ($9.4 billion) in 2015.

Shanghai steel-rebar futures were trading nearly flat at 3,225 yuan a ton in Thursday-afternoon trading, reversing sharp gains this week amid efforts by China to crack down on illegal production of low-quality steel from scrap in Hebei province, the country’s largest steel-producing province, Argonaut Research said.

China has embarked on a program this year to cut back steel output capacity by up to 150 million tons by 2020. Nearly 25% of China’s steel-production capacity is excess. About 10% of the excess capacity has been pared back.

Imports of iron-ore from January to November were up 9.2% on year, while imports during November were up 12% on year, showing that demand for the critical steelmaking material was still robust among China’s steel mills.

 

Source:wsj.com

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