Chinese Crude Steel Output Continues To Rise—What Is MSCI Doing About It?
As Bloomberg pointed out last week, Chinese steel mills have defied international calls to curb supply and have instead increased output. Crude-steel output in China rose 0.4 percent to 603.78 million metric tons in the first nine months of 2016 over the same time period in 2015. Supply was up 3.9 percent in the first three quarters.
Output had declined in China from 2014 and 2015 and analysts had predicted a “significant”—around five percent—drop in production this year. Analysts at Australia and New Zealand Banking Group Ltd. now expect production to increase three percent in 2016. Chinese exports of steel increased 2.4 percent in the first nine months of 2016 and are now at their highest point ever.
These increases are fueled, in part, by government policy. Bloomberg noted Chinese mills “fired up plants as policy makers added stimulus, boosting demand, and a price rebound improved profitability.”
As a reminder, MSCI is taking strong steps to address Chinese steel and aluminum overcapacity. Click here to read about MSCI’s September testimony to the U.S. International Trade Commission regarding aluminum overcapacity and here to read about MSCI’s May testimony to the U.S. Trade Representative regarding steel overcapacity. MSCI also continues to work with its partners at the Manufacturers for Trade Enforcement coalition to ensure that China does not gain market economy status from the World Trade Organization. Get the latest on those efforts here and here.
MSCI will discuss these advocacy efforts on Monday, Nov. 14, as part of its Aluminum Conference programming. MSCI President and CEO Bob Weidner will be joined at the conference by Heidi Biggs Brock, president and CEO of the Aluminum Association, and Jeff Henderson, president of the Aluminum Extruders Council, to discuss the action being taken by industry coalitions and the possible outcomes of their efforts. Click here to learn more.