Chinese Steel and the Global Economy - 11/3/15
As many economic observers know, China’s economy has been slowing. That has many implications for the global economy, including for steel manufacturers located around the world. China produces about half of the world’s steel, more than the U.S., European Union, Russia and Japan combined. Over the past decade, the nation’s construction boom meant that China’s steelmakers could depend upon steadily growing demand for structural steel.
But as reported by CNNMoney, the building bonanza is over in China. Accordingly, the World Steel Association forecasts that China’s demand for steel will fall three point five percent this year and by another two percent next year. The implication is that Chinese steel producers have needed to find other customers for their output, and those other customers are located abroad. Exports of steel from China have risen by nearly 30 percent this year.
Those exports are helping to suffocate steel production elsewhere. India’s Tata Steel recently announced that it was slashing nearly twelve hundred jobs across the UK. Another large producer, ArcelorMittal, is shutting down two plants in South Africa. That company also recently closed a facility in Georgetown, South Carolina, costing more than two hundred people their jobs.