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China steel sector sees higher demand in second half, calls to fend off import surges

FILE PHOTO: Workers wearing face masks following the coronavirus disease (COVID-19) outbreak load steel products for export to a cargo ship at a port in Lianyungang, Jiangsu province, China May 27, 2020. China Daily via REUTERS/File Photo

BEIJING/SHANGHAI (Reuters) - Chinese major steel producers had suggested to prevent sharp increase in imports of the industrial metals and to relax purchase of overseas steel scrap, the China Iron and Steel Association (CISA) said on Wednesday.

Nine steelmakers, including the biggest China Baowu Steel Group, Shougang Group and Ansteel Group raised concerns on the steel market amid the coronavirus disruptions and rising production costs, the companies said at a conference held by the CISA on Sept.9.

“The steel sector will see increasing demand, sufficient supply, easing but still high inventories, falling but stabilising performance in the second half of the year,” the steel body cited the companies as saying.

The steel mills had advised the association to strengthen monitoring of steel trade, push forward mergers and reorganisations and ease raw material supply and demand pressure.

China’s steel sector has bucked the trend of global sluggish demand due to the pandemic in 2020, supported by a raft of economic stimulus such as infrastructure investments, but also dented by increasing raw material prices and imports.

The world’s top metals consumer ramped up purchases of hot-rolled coils and semi-finished products in recent months, fuelled by lower overseas prices.

Its overall imports of steel products had jumped 59.6% in the first eight months of 2020 compared with same period year earlier.

He Wenbo, chairman of the CISA told at the conference to “correctly understand” recent net imports of crude steel and to take new measures amid turbulent international situation to safeguard industry benefits.

“In the long run, trade remedy is a double-edged sword,” the steel body cited He in the statement. “The fundamental solution is to enhance companies’ competitiveness. There’s large room to lower institutional cost.”

Reporting by Min Zhang in Beijing and Emily Chow in Shanghai, editing by Louise Heavens

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