Emerging Trends in High Carbon, Spring, and Abrasion-Resistant Steel

The specialty steel sector in China is at the forefront of discussions on regulating export practices, a central focus of the Steel Export Work Conference held by the China Iron and Steel Industry Association (CISA) on October 11th at Nanjing Steel Group. The meeting emphasized the importance of increasing high-end steel product exports, particularly specialty steel, while curbing low-end and illegal exports. Leading steel companies such as Baowu, Ansteel, and Nanjing Steel Group were represented at the event, which was led by CISA Vice President Luo Tiejun and Deputy Secretary-General Shi Hongwei.

Export Trends and Challenges in 2024

Data presented during the conference provided insights into China’s steel export performance in 2024. From January to August, exports surged by 20.6% year-on-year. However, the overall volume of exported products dropped by 6.8%, reflecting a shift in the market. Notably, trade remedy investigations into Chinese steel products, including specialty steel, have soared to 23 cases, exceeding the combined total from 2021 to 2023.

Participants discussed factors influencing steel export competitiveness, with the appreciation of the RMB, driven by U.S. Federal Reserve interest rate cuts, cited as a key issue. While foreign markets have offered higher profit margins, international trade tensions remain a significant challenge. The discussion focused on how China could maintain its competitive edge by intensifying efforts to combat illegal exports and by reinstating export tax rebates for high-end products like specialty steel.

Key Discussions and Proposals

CISA Vice President Luo Tiejun highlighted how many steel enterprises, particularly those focused on specialty steel, view exports as a critical means of easing domestic market pressures. With demand for real estate steel declining and discrepancies in pricing between domestic and international markets, exporting high-end steel is seen as essential.

Combatting Illegal Exports: Luo stressed the importance of targeting illegal exports, which undermine the competitiveness of China’s specialty steel sector. A joint investigation team has been established, and efforts to improve communication between key stakeholders are underway.

Export Tax Refunds for High-End Steel: Luo pointed out that the large volume of steel exports complicates efforts to implement export tax refunds for high-end products. Nonetheless, CISA believes that these refunds would not fuel overall export growth but instead help shift the focus away from low-end products. This policy could benefit the specialty steel market by promoting high-end product exports.

Responding to Trade Frictions: CISA and major steel companies are actively working together to respond to trade remedy investigations that disproportionately target high-end specialty steel products. Organized responses are essential to maintaining China’s market share in the global steel industry.

Carbon Border Adjustment Mechanism (CBAM): The EU’s CBAM, along with similar measures being developed by other nations, poses a considerable challenge to China’s steel export sector. Luo emphasized that CISA is formulating strategies to counteract the potential impact of these carbon-related tariffs, ensuring that China’s specialty steel remains competitive.

Long-Term Focus: Carbon Emissions and Market Balance

CISA’s future strategy revolves around the specialty steel industry’s adaptation to global carbon control measures. Luo Tiejun outlined a shift from energy consumption management to carbon emissions control, which will involve adjusting production capacity to comply with carbon emission targets. This strategy is designed to create a more balanced supply-demand relationship, supporting the growth of high-end steel production and exports.

As the industry moves forward, CISA will continue to push for policies that support the specialty steel sector. This includes advocating for export tax rebates for high-end products and working with the government to curb illegal exports. The guiding principle remains: “encouraging high-end, restricting low-end, and cracking down on illegality.” By adhering to this approach, CISA aims to enhance the global competitiveness of China’s steel exports while promoting sustainable development practices.

With these initiatives, the specialty steel sector is expected to remain a key player in the global steel market, positioning China’s steel enterprises for continued growth and resilience in an increasingly competitive international landscape.