ArcelorMittal South Africa, a Gauteng-based steelmaker partially owned by South African businesswoman Noluthando Gosa has raised concerns about Chinese steel exports affecting global markets.
The company highlighted the unsustainability of current market conditions due to a flood of cheap Chinese steel in a Thursday statement. This influx caused a fall in second-quarter profits for the world's largest steel producer outside of Asia.
Impact on global tradeThe surge in Chinese steel exports has worsened trade tensions, particularly with the US and European Union. These regions accuse China of using state subsidies to create excess industrial capacity. Despite trade barriers, including European tariffs, the steel market remains volatile, with prices dropping below marginal costs in both the US and Europe. ArcelorMittal has lowered its forecast for steel consumption growth outside China, signaling broader economic challenges ahead.
"Current market conditions are unsustainable," ArcelorMittal stated. "China's excess production relative to demand results in very low domestic steel spreads and aggressive exports. Steel prices in Europe and the US are below the marginal cost."
