European and Chinese Steelmakers Face Row Over Dumping | Business| Economy and finance news from a German perspective | DW | 09.10.2007
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European and Chinese Steelmakers Face Row Over Dumping

European and Chinese steelmakers are heading towards a dispute over price dumping after the Europeans accused their rivals from Asia of exporting at prices below production cost.

A Chinese steel worker labors at Shougang Steel company in Beijing, China

European steel firms have made a number of complaints against their Chinese rivals

The Europeans, meeting with their Chinese competitors at a conference in Berlin on Monday, Oct 8, also threatened to register an official anti-dumping complaint with the European Commission.

"Complaints like this are always the last resort when all the political measures have been exhausted," Dieter Ameling, President of the German Steel Federation, said.

China, which was the world's biggest importer of steel in 2004, has since become the world's biggest exporter and is now responsible for 34 percent of the world's steel production.

Environmental and quality standards questioned

Steel rolls in a ThyssenKrupp facoriry in Germany

German steel firms feel their product is being under cut

European producers accuse Chinese factories of failing to respect the environment and making poor quality steel. The Europeans also complain that about the large subsidies the state-run Chinese steel companies receive.

"It is a situation of state-run production, while in the rest of the world steel is produced by private companies designed to create value," said Karl-Ulrich Koehler, the head of Germany's ThyssenKrupp Steel, the world's tenth-biggest producer.

Ameling said that "instead of exporting the steel that is produced in China at great cost to the environment, it would be better if the Chinese withdrew their polluting products from the market."

Zhang Xiaogang, chairman of the China Iron and Steel Association, responded by telling the conference that inefficient steel mills would be closed by the end of the decade in a move towards consolidation.

"By 2010, the iron and steel enterprises will be decreased greatly in number and production by the top 10 enterprise groups in the country will make up over 50 percent of gross crude steel production in China," he said.

Demand for steel expected to increase

A steel factory lights up the night sky

China's economy will be one of those driving steel demand

The International Iron and Steel Institute (IISI), which is hosting the conference, said in its latest forecast on Monday that global demand for steel will keep growing next year in response to strong economies in China, Africa and the Middle East.

IISI expected steel demand to grow by 6.8 percent this year and by around the same level in 2008, slightly more than a forecast earlier this year.

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