China urges EU to cooperate on iron, steel overcapacity

A worker is pictured in Shougang Jingtang United Iron & Steel Co on Aug 28, 2014. [Photo / Xinhua]

China has called on the European Union to work with it to jointly address global iron and steel overcapacity instead of resorting to trade protectionism that will have a further negative impact on the global iron and steel industry, the Ministry of Commerce said on Wednesday.

Speaking at a news conference, ministry spokesman Shen Danyang said in response to the EU's latest anti-dumping measures against Chinese iron and steel exporters that overcapacity in the sector is a global problem which could only be solved through dialogue and cooperation.

"The Chinese government and iron and steel companies have been working to accelerate structural adjustment and keep overtly high production capacity down. The increase in the output has been taken under control. The competition mechanism has eliminated some smelters," said Shen.

The iron and steel industry has become the main area where China-Europe trade friction occurs. Since 2014, the European Union has initiated 15 trade remedy investigation into Chinese exports, of which eight cases are in the iron and steel industry.

On Feb 12, the EU launched investigations into whether Chinese seamless pipes, heavy plates and hot-rolled flat steel were being imported at prices below cost. It then announced provisional anti-dumping duties on cold-rolled flat steel from China and Russia.

Chinese steel exports were the subject of 37 investigations worldwide in 2015, equalling the total number over the previous two years, the China Iron and Steel Association warned in January.

More than 5,000 iron and steel workers held a protest outside the EU's headquarters in Brussels against imports from China, calling on it not to recognize China's market economy status.

"Blaming China for the slumping iron and steel market in Europe is unfair," said Xu Liying, a researcher at Lange Steel Information Research Center.

"In recent years, the EU has frequently imposed anti-dumping and anti-subsidy measures against iron and steel imports from China and other exporters. These measures have produced few results in bringing down the import volume, which has shown that the problem lies not in imports but in the iron and steel industry in Europe itself.

"China saw a wave of shutdowns last year in small- and medium-sized iron and steel smelters. However, it is State-owned enterprises that can really impact the total output. The central government has called on them to replace outdated capacity with advanced technologies. But it will take time for these measures to have an impact," Xu said.