Speaking at the SteelOrbis 2016 Spring Conference & 74th IREPAS Meeting being held in Lisbon on April 10-12, F.D. Baysal from Seba International, the chairman of the traders committee, said that looking at the price environment today the traders committee believes that steel mills will likely increase their outputs, instead of reducing them.
Commenting on the Chinese government’s announcement of a 100-150 million mt reduction in steel production capacities, Mr. Baysal said that this will not be sufficient to have any impact on the export capacity the Chinese have at hand. He went on to say that, considering the expected decline in Chinese steel consumption to 595 million mt by 2020, the planned capacity reduction of 100 million mt will have zero effect. He also explained that what China is doing is just replacing old-fashioned mills using coal with new ones like Baosteel is doing with its new 9 million mt per year plant, and so they will provide tougher competition with their new state-of-the-art mills.
Regarding the lifting of sanctions against Iran, the traders committee chairman said that they had thought Iran would be a good alternative market for sales, whereas Iran is instead proving to be an exporter, selling billet to the Turkish market. He added that he believed there will be more exports coming from Iran.
Lastly, he said that it is not a good time to grant market economy status to China. Although he considers that the granting of market economy status will create a level playing field for everyone, he said it will be tougher to impose high rates of antidumping duty for Chinese producers.