China’s steel exports have hit a record level this year at more than 100m tonnes, illustrating how the country is relying on global sales to help reduce surplus production.
Rising Chinese exports of processed raw materials from steel to aluminium have helped pushed commodity prices down to their lowest level in almost a decade, hitting the shares of global miners and steel producers.
A weaker currency is likely to help China’s exporters even further. The renminbi traded at a four-year low yesterday, after the People’s Bank of China cut its reference rate to the lowest level since 2011.
Total steel exports from China rose 22 per cent in the first 11 months of the year to 101.7 million tonnes, data show. And yesterday the finance ministry said it would cut export taxes on steel billet from 25 per cent to 20 per cent.
“China’s steel production is being cut only very slowly and not nearly at the pace needed to rebalance [domestic] or global markets,” said John Kovcs, analyst at Capital Economics.
