China’s share surges to 54% in April. US in fourth Place, Canada an Also-Ran.
Global production of crude steel – ingots, semi-finished products (billets, blooms, slabs), and liquid steel for castings – rose 6.4% in April compared to April last year, to 156.7 million metric tonnes (Mt), according to the World Steel Association. Over the first four months of 2019, global production rose 4.8%, to 600 Mt.
In the banner-year 2018, production rose 4.5% to a record 1,808 Mt, having doubled since 2002. Since 1996, there have been only three episodes when annual crude steel production fell: 1998, as a consequence of the Asian Financial Crisis; 2009 as a consequence of the Global Financial Crisis; and 2015, when China made a brief effort to get out-of-control overproduction under control:
China v. the rest of the world:
In the year 2018, China alone produced 928 Mt of crude steel, up 6.6% up from 2017. This represented 51.3% of annual global production.
In the first four months of 2019, China’s crude steel production jumped 10.3% year-over-year to 315 Mt, bringing its share to 52.5% of global production.
For April alone, China’s production soared 12.8% year-over-year to 85 Mt, and its share of global production reached 54.2%. That’s the new record.
The US, by comparison, the fourth largest crude steel producer, maintained its minuscule 4.7% share of global production over the 12-month period.
Vietnam, which in April moved up to 15th place, from 17th place for the year 2018, booked a huge jump of 42% in crude steel production in the first four months this year compared to 2018. For now, it’s still only a small producer with a share of less than 1% of global production.
In the rest of the world without China, production over the first four months in 2019 declined by 0.6% year-over-year.
The chart shows the monthly production of China (red) and the rest of the world (black), including the US in 2018 and 2019; in addition as a memo entry, just to see where we are, I added US production (green):
China’s steel production began surging out of near-nowhere in the late 1990s to end up outproducing the entire rest of the world, according to the data by the World Steel Association (worldsteel):
China’s mostly state-owned steel giants just kept on producing during the Financial Crisis, whether there was demand or not, causing prices to dive. Its market share jumped from 38% in 2008 to 47% in 2009. And its share has continued to grow. The chart below shows the global share of production in China and in North America (US, Canada, and Mexico):
The largest crude steel producers in the world.
No country comes even close to China’s crude steel production. For example, its production is 11 times the amount produced in the US. But second and third place are just a hair apart. In 2017 India was in third place. In 2018, it moved into second place with 106.5 Mt., having outproduced Japan (104.3 Mt). The US is in fourth place (86.6 Mt). Canada is in 18th place:
Of the 15 companies that produced the largest quantity of crude steel in 2018, according to worldsteel, six are owned or controlled by government entities in China. The only US steelmaker on this list is Nucor in 12th place. In order of tonnage of crude steel:
- ArcelorMittal (96.4 Mt) – in 2006, India’s giant Mittal Steel acquired French giant Arcelor; now registered in Luxembourg as a mailbox company run from India.
- China Baowu Steel Group (67.4 Mt) – owned by the government of China.
- Nippon Steel Corporation, formerly Nippon Steel & Sumitomo Metal Corporation (49.2 Mt) – Japan.
- Hesteel Group, formerly HBIS Group (46.8 Mt) – owned by the government of Hebei Province, China. Also includes Serbia Iron & Steel d.o.o. Beograd and MAKSTIL A.D. in Macedonia
- POSCO (42.9 Mt) – South Korea.
- Shagang Group China (40.7 Mt) – privately owned, China.
- Anshan Iron and Steel Group, or Ansteel Group (37.4 Mt) – owned by the government of China.
- JFE Holdings (29.2 Mt) – Formed in 2002, when Japan’s second largest steelmaker NKK Corporation merged with Japan’s third largest steelmaker Kawasaki Steel.
- Jianlong Group (27.9 Mt) – privately owned, China
- Shougang Group (27.3 Mt) – owned by the government of Beijing, China.
- Tata Steel Group (27.3 Mt) – India.
- Nucor (25.5 Mt) – North Carolina, USA
- Shandong Steel (23.2 Mt) – owned by the government of Shandong province, China.
- Valin Group (23.0 Mt) – controlled by the Chinese state, with a minority of shares publicly traded
- Hyundai Steel Company (21.9 Mt) – South Korea
Chinese government-owned or controlled steelmakers have some advantages, such as no-matter-what funding from giant state-owned banks that are backed by the PBOC, and giant state-owned customers.
While China is by far the largest producer of crude steel, Chinese companies also used 1,712 Mt of crude steel in 2018, or 48.8% of global use, in the production of finished steel products for sale in China or for export. In other words, most of the steel that China exports is not crude steel but finished steel products.
Exports from China are a murky thing. To dodge tariffs, some of it gets transshipped via other countries, such as Vietnam, before the products are shipped to their destinations, such as the US or the EU, which has had tariffs on Chinese steel for years.
China’s corporations deleverage, forced or otherwise. Read… The Countries with the Most Monstrous Corporate Debt Pileups: US Fizzles in 24th Place! Canada Shines in 11th Place
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So, where is all that Greenhouse gases Canada is producing and all it citizens have been forced to pay carbon taxes for by our political imposing without our say so…
Canada ships it’s CO2 problem to other countries.
30 million tons of coking coal annually and 3 million barrels a day of heavy oil are forbidden to be burned in Canuckistan, but there is no problem shipping it somewhere else on this planet to be burned.
It is part of the smug, see no evil character, propagandized daily.
Bingo. China’s emissions are so high because everybody else offshored them there.
This. Offshore your dirty industry then blame world pollution on the people you offshored it to.
“China’s emissions are so high because everybody else offshored them there.”
Right, China is IN NO WAY responsible for it own emissions.
Canada may be an also- ran in the world’s steel biz, since it seems to be biz every country feels it MUST be in, but it is the largest exporter of steel to the US.
It looks like this was only discovered after Wilbur Ross talked Trump into the tariffs to get China. He used national security grounds to go around Congress, then found out the threat was from Canada. Ross had just come from a meet with old buddies from the primary steel biz, of which there are only two in the US.
The last time I looked at this there were about 20 thousand US applications for exemptions (Trump seems to think the exporter pays the tariff but no one really knows what he thinks)
About a dozen or so had been granted. One successful applicant: Gillette. I guess Gillette is better able to lobby than the small US maker of steel beer kegs who says his business may not be viable with the tariffs. Oddly, he is competing against Chinese kegs that aren’t subject to the tariff. Just the steel not the kegs.
Another applicant for exemption on the aluminum tariff, Hershey. You know that really thin foil chocolates are wrapped in, well there is only one manufacturer of it and it’s not US. (Belgium?)
There is about zero chance that a US outfit will start in this niche.
There is a big steel mill in California where the workers cheered when the tariffs were announced. Then came the notice of layoffs.
It’s not a primary producer, it’s a rolling mill that uses Russian slab steel.
It looks like at least a hundred US jobs will be negatively affected for each one added in primary steel. Maybe it’s a thousand in a high tech value- added place like the US.
But who knew trade was so complicated?
Translation: the world is awash in steel it and will be for the foreseeable future. Everyone thinks it is strategic and therefore it isn’t. You can buy it cheaper anywhere than you can make it. Bake your own bread lately?
The UK in a knot about its last few steel mills? If a guy orders the Mini with leather seats I’ll bet there is more profit than if they used UK steel.
If India and China want to do the dumb work of steel making so we can add value….let them!
Most valuable company: Apple. It doesn’t manufacture, it designs and subs out the grunt work.
I bake my own bread. Organic ingredients… much more wholesome and nutrucioius than store bought crap. No need to pay $20 for a loaf of artisan either.
The same with steel. The US and Canada produce the high grade stuff, for hi-tech processes. That is the future – small, just-in-time production, mostly automated, high spec, perfect quality. Let china flood the world with cheap crap, indeed, slap tarrifs on it.
Quite true. But China’s steel production supports the livelihoods of 10’s of millions of Chinese people. Apple and high-tech uses, not so much.
But Walmart can hire a million people at minimum wage to sell those Chinese products to broke Americans.
We bake our own bread at home too! It’s all about quality over crap. In the end countries like China are only destroying their long term interests by producing more than the market demands.
Who would have imagined that a discussion of steel would provoke several home bakers?
OK, but since this is economics forum, what percentage of bread is baked at home? I suggest, not statistically significant.
Thanks Wolf, your article set off a number of connecting dots.
In 2019 world of transparency, if I’m a large world actor with an agenda, I need a proxy to hide behind, to do my bidding, to avoid scrutiny to minimise risk of disruption to my strategy.
Many examples of Google creating subsidiary companies where they might be investing in the start of something controversial related to more surveillance, more joined up big data, and less ownership of personal data by individuals. It was an interesting AGM at Google on 18th June, diversity discussion or not as the case maybe.
Regarding UK Steel, Redhall Group PLC has recently had investment funding withheld thus impacting Jordan manufacturing and Booth, both in the steel supply chain. Redhall activity suspicious. Board made up of ex-DB and cartel bankers. Placed a COO 18 months ago, promoted to CEO, then 7 months later let him go. Intention destabilisation. No wonder shares suspended.
British Steel is being placed on the altar of Brexit sacrifice. China, via HNA was the largest stakeholder in DeutscheBank until it started divesting in 2019. HNA borrowed heavily to build up to 9.9% in DB, now in 2019 they are reversing buying spree. Is HNA using DB as a proxy to revenge the Huawei decision on 5G, China appears to be on a home run to take complete control of world steel. It’s last hurdle, India.
Had intuitive flash several years ago, next war is between China and India. The more I assess this intuition the more probable it appears. India northern borders issues.
On 14 May 2019 Japan (doing China a favour?) lodged WTO dispute complaint against Indian tech tariffs. India is ignoring the IT agreement it signed up to to generate income to invest into the “India IT brand”. Will be interesting to see how arbitrators resolve.
Bit of background: The Information Technology Agreement (ITA) was concluded by 29 participants at the Singapore Ministerial Conference in December 1996. Since then, the number of participants has grown to 82, representing about 97 per cent of world trade in IT products. The participants are committed to completely eliminating tariffs on IT products covered by the Agreement. At the Nairobi Ministerial Conference in December 2015, over 50 members concluded the expansion of the Agreement, which now covers an additional 201 products valued at over $1.3 trillion per year.
Steel and rare earth are China’s addiction which drive their 5G innovation and IT agenda. 5G is a tool of warfare. Please do research before discarding this comment.
MH370, the missing plane, had 20 passengers (12 Malaysian, 8 Chinese) who worked for electronic warfare and military radar firm, Freescale. Freescale owned by Carlyle group who are close to the banking cartel. Now Carlyle owns the patent on the radar chip.
Technology warfare is being played out in front of our eyes, yet many are blind to it, instead worrying themselves unnecessarily with cyber security. Backdoors were built in by design. The mobile phone innovated out of warfare research, some bright spark perked up and said, wouldn’t it be great if we got everyone in the world to buy their own personal trackers so we could keep tight surveillance on them and take them out if they posed an issue to our strategy.
Max Warburg of Hamburg gave Coudenhove-Kalergi sixty thousand gold marks to start the Paneuropa movement in 1924 having read his book. Max then financed and “took the preparations himself” for Kalergi’s trip to America the following year. Where Kalergi met Max’s two brothers who had become influential in America, Felix the philanthropist and Paolo, the creator of the Federal Reserve System. This is the banking cartel, the Fed is the EU is the Fed.
Over the last week, the world came exceedingly close to ‘the button being pressed’. Reversing from that decision is possibly the very first step of the 21st Century where humans started to mature as a species and positively chose to develop rather than destroy. It will be easier next time to walk away from pressing the button. Hope for this planet yet. I wonder whether we can get India and China around a table to talk through the tension instead of acting on it?
Wow, that comment threads a lot of unrelated events together…. Perhaps you’re on to something. I’m of the opinion, chaos and clashing objectives is more prevalent than coordinated global conspiracies… interesting nonetheless.
Wolfstreet is grounded in hard data, no need for conspiracy theories. ?
a) Facebook draws scrutiny for sharing data. b) Russia probe provides (hard) evidence trolls used platform to instigate dissent c) FB pulls plug on hate sites d) DOJ goes after FB for banning “free” speech and hate sites e) FB institutes new cryptocurrency “Libra”, crypto is a workaround for punitive sanctions. f?) China allows FB thereby abandoning capital controls g?) foreign ownership of US assets reaches critical point h?) US steel workers make $10 hr, jobs return, Chinese owned companies i?) Both sides declare victory
Some steel of sub-standard quality from China.
Case in point:
The Canadian city of Victoria had wanted to replace the aging Bay Street bridge for years. When the tender was finally awarded, the contractor placed an order for the complex steel beams with a Chinese company.
Complete with a lengthy list of requirements. eg: steel composition, coatings, sheer strength, malleability, through holes, etc.
The delivery date kept being pushed forward by the Chinese, putting the project behind schedule. When the steel beams were finally delivered, they were found to be of sub-standard quality and were rejected.
The Chinese company had to redo the entire steel beam contract, which now pushed the bridge completion date not months, but over a year late.
Long story short, the bridge cost over-run was almost twice the original estimate, and over two years late in completion. But what the heck, taxpayer has got lots of money!
Yeah, I forgot about that one, Out. Perfect example. Another issue is Chinese counterfeit fasteners, especially in the airline industry. This has been going on for years. Example: A structures shop needs a specific grade bolt to hold on a wing spar, orders the fasteners from a US supplier, only to find out the grade stamp was phony and the bolt was a sub standard imposter from China.
Fasteners from China (and India) are being bastardized. Grade 8 bolts are just brittle copies of the high strength bolt they used to be. And they are everywhere and dangerous.
Paulo-spot on. Counterfeit fasteners out of Taiwan, Korea and gawd-knows-where-else were a problem before China seriously arrived on the scene (had this problem racing superbikes back in the ’80’s). The new Bay Bridge here in CA hit the same issues as Out described for Victoria.
It’s not that the Chinese can’t make good quality, but their merchant history makes dilution of any product in the interest of market share and eventual profit irresistible. Example: in our moto shop in the early ’00’s one of our regular apparel suppliers came with a new line of China-sourced waterproof winter riding gloves-outstanding quality, unbelievable price. Sold out the first shipment in a quarter to great feedback and word-of-mouth demand from our customer base. Ordered more. Almost immediately the gloves in the second shipment started coming apart. Close examination revealed a switch to poor-quality cotton thread from the synthetic original spec, and, to make it worse, single-stitching in areas that were previously double. We had to do almost 100% refunds/returns on these, although we had a few customers who toughed out the eight months it took for our supplier to replace the bad product with original-spec (nationwide, you can imagine their headache was bigger than ours, but their supplier in China doubtless made their short-term profit off of the second shipment…). QA is your constant job, even if, by rights, it shouldn’t yours (but how many can truly assess quality in a manufactured good these days when the price is so cheap one becomes used to a frequent breakage and replacement regime?). ‘…for want of a nail…’. May we all find a better day.
Well if you don’t want Chinese steel you have LOTS of other choices.
This reeks of govt procurement. Industry often throws out the lowest bid automatically. Many suppliers, e.g., German, will tell you up front ‘we don’t compete on price’
If you want the lowest price go to Walmart
Is that the fault of the chinese or the buyer for not verifying quality before buying?
Dan – “…lengthy list of requirements. eg: steel composition, coatings, sheer strength, malleability, through holes.”
The Chinese signed a contract agreeing to provide the steel beams to the above specifications. If you can’t do the job, don’t verify that you can.
“not verifying quality before buying?”
One cannot verify the quality of the finished product before it is produced. I’m sure any samples the Chinese manufacturer supplied before the production run would have been in spec and perfect. With the Chinese, ripping off customers and stealing IP is culturally acceptable and entirely normal. In short, they are unashamed thieves. This is just one paper of several on that subject:
JOURNAL OF CHINESE ECONOMICS, 2014 Vol. 2. No. 2, pp 73-78
Call for Copy – The Culture of Counterfeit in China
Ling Jiang
Abstract: The aim of this paper is to deepen the understanding of Chinese counterfeit phenomenon by exploring the effect of culture. Counterfeit activities are shaped by Chinese historical, social and political reasons. Intellectual property rights protections don’t have an obvious presence on Chinese soil. The discussion of counterfeit
consumer behavior research via the effect of culture is provided.
Key words: Counterfeit, Shanzhai, culture, China JEL Codes: N56, O34, P48
Here’s the graphical results from a new planted “lost wallet” return study of national honesty making the news. Note the worst country at the very bottom.
https://2378nh2nfow32gm3mb25krmuyy-wpengine.netdna-ssl.com/wp-content/uploads/2019/06/wallet.jpg
Yeah, when steel is not exactly steel. Like the other knock-offs from China: it may look like steel, shine like steel, but…. In many cases, such as the bridge you mentioned, the Chinese may send inferior beams just to see if they can slide it through.
I stopped buying anything from Harbor freight, the metal is no good in anything there. For example, some tools may indeed have diamond content for cutting, but the metal is so inferior it melts with use.
When it comes to food or bridge beams from China, count me out.
Well Nick, I have baked our bread for the last 20 years, and do it now with my eyes closed. :-) I do it for the taste and quality. Savings? maybe $50/month.
As far as being an also ran as Wolf implies, I guess Canada will just have to remain an efficient and profitable aluminum producer, miner, and forestry nation. Gotta love those high paid union jobs. :-) Seems bettter to produce/own the iron/copper ore and have ample hydro electric energy for profitable aluminum smelting than manufacture cold rolled steel out of someone elses product. When oil hits $100/bbl we’ll end up doing it here to save on transport.
Wolf, are your numbers right in your list of top 15 companies?
1. China Baowu Steel Group (67.4 Mt)
2.ArcelorMittal (96.4 Mt)
Seems ArcelorMittal 96.4 Mt > China Baowu Steel Group 67.4 Mt if I understand correctly. Perhaps it is 66.4 instead of 96.4?
Feel free to delete this comment after you review.
The World Steel Association’s page lists Arcelor-Mittal as being the top producer, with China Baowu Steel Group in second position. The figures (96.42 and 67.43) are the same as mentioned in the post.
https://www.worldsteel.org/steel-by-topic/statistics/top-producers.html
The numbers are correct. The positioning is reversed. Thanks for pointing this out. My eyes were reverting to their dyslexic nature or whatever, and figured that 67 was bigger than 96.
I have come across dodgy Chinese steel certificates in the past.
The “as built” material fails the stress checks, and, hey presto, sorry there was mistake, the material that was used was much stronger and here is a fresh certificate to prove that.
I had a customer who was saying; make the stresses work and I will supply certificate to suit.
Had to walk out of a few projects.
Wolf,
FYI Mittal has several big mills in the US. They bought ISG from Wilbur Ross and the deal included the LTV mills.
https://usa.arcelormittal.com/our-operations/steelmaking
Is all the steel China is making being used or is it sitting in fields and China just wants to keep their steel factories producing without regard to selling product? Do you have data on steel consumption?
According to this article, China exports mostly finished steel. Where does finished steel scrap go for recycling? China?
Nope.
Mostly, Turkey (!), Taiwan and South Korea
https://www.scrapmonster.com/news/us-scrap-iron-and-steel-exports-slump-22/1/71345
What one would expect: Evidence is starting to emerge that export destinations are shifting to avoid tariffs.
http://magazine.recyclingtoday.com/article/january-2019-scrap-metals-supplement/new-ferrous-scrap-trade-trends.aspx
I am an insignificant small time side hustle player in the scrap game. Always awed by the 50 foot wall of scrap at the yard when I haul runs. The scrap yard 24/7 perpetually pumps out container after container full of scrap. All shipped to China where they take an old rusty barrel full of holes in it and magically transform into a new porch swing sold at WM. Alchemy
I am surprised wolfstreet has not been banned yet for the sensitive topics discussed. As long as it is up I keep reading.
I know it is shocking for some to hear but actually the Chinese gov cares for the development of it’s own country. And they need a lot of steel, for them is makes sense to lose 1% on manufacturing/construction because every dollar invested (or lost) in these industries will produce $10 more in other industries. This is the real multiplier effect. (Not the bogus US Fed’s 0.25% interest rate change that produces nothing but funny money for NY crooks to borrow more and buy more stocks…)
I was a young teenager in 1968? when I alerted my parents to a story in the Sunday newspaper that the USSR had surpassed the United States in steel production. It was a worrisome thing as steel production had long been a sort of proxy for industrial strength and there was a joke that rooting for the New York Yankees was like rooting for US Steel so powerful were both outfits.
A lot can be learned looking back over those 50 odd years. The Fortune 500 of 1968, which I also studied, had the oil majors and big three auto companies at the top of the list. IBM, by virtue of its Selectric typewriter, was the heavy hitter in ‘tech’. Kodak was too.
Newspapers during the Cold War reported propaganda without questioning, regardless of who had generated that propaganda. Going on a sob story about Soviet glass production was a great way to get tax breaks and/or subsidies for the glass industry. ;-)
And we know how things worked out in the end.
The delicious irony is that when the USSR fell apart like one of their cars, so many of those giant steel mills, chemical plants and car factories were slowly abandoned or shut down overnight when the new governments decided they had no need for them.
Those giant industrial complexes are now being slowly but steadily dismantled and supply a steady stream of scrap metal to the whole of Eurasia, so much the highways linking the former USSR to China are nicknamed “Rust Highways”.
I wonder if the same fate will befell China’s useless industries as well.
“China’s mostly state-owned steel giants just kept on producing during the Financial Crisis, whether there was demand or not, causing prices to dive.” After the March bulge in China’s credit, most analysts thought it was one and done, but they are back. China uses economic slowdowns to increase their market share of global production. Over capacity is not an issue with 1.3B people, though clearly not pro-life, they restrict parenting, so peak population is out there somewhere and there is too much steel.
Bbbbbut muh global warming!!!
This is why China will dominate the world. While we (the west) freak out that the temp may increase 0.2 degrees due to global climate warming change, in the next 100 years, China just goes about its business. Our own stupidity will be our downfall.
Two points to give you an idea of how China “just goes about its business”:
Point 1. In 2013, China became the largest installer in the world of photovoltaic panels, and the lead has widened since. At the end of last year, it had 174 GW of installed solar-power capacity, about three times the US capacity. In addition, thermal-solar water heating is becoming more widespread.
In terms of actual electricity production, given how much electricity China generates overall in its power-hungry economy, the solar portion is still very small, but remember, it’s brand new in China, just started a few years ago, and regular power plants have been around for well over 100 years. So a lot of catching up to do. But they’re serious about catching up.
Point 2. China has by far the most battery electric vehicles in the world on the road, after just a few years of trying.
Massive government incentives have triggered a tsunami of EV and battery manufacturing and sales. Now China has become the leader in EVs globally. When the Chinese get serious about something, they make it happen. That’s how “China goes about its business.”
Yup. And the Chinese leadership takes the long term view, not being hamstrung by having to win an election in 5 years.
China also goes about its business with regards to industry. Their goal is world domination. Period. Not saving a spotted owl or other enviro nonsense we preoccupy ourselves with. The reason they have EVs is because they know the west will eventually ban ICE engines and they will be there to dominate the market. They know we’re idiots and are poised to profit from out idiocy.
Chinese leadership is aware of public opinion, and even a non-benevolent dictator can see the need for clean air. RE World Domination! let’s see how China does in post-colonial Africa, and how it handles it’s 200M Muslims as well as all those along the Belt and Road. The Western nations evolution on these issues was slow and painful. Perhaps they learn from our mistakes?
Do you know how else China goes about its business? By the systematic infiltration of US institutions in order to enable theft of intellectual property. You’ve heard about this in the abstract for three decades. It’s about to come to the forefront.
There isn’t a story out there on this, yet, which is surprising to me given that the NSF and NIH are affected deeply.
It is called state sponsored capitalism. If anyone thinks that model is going away any time soon, they are kidding themselves. I have heard that China is either the number one or number two producer of industrial robots at this point.
Most of it is on state run subsidies. At some point, once they achieved dominance, the state is going to step back and let the hunger games kick in to winnow out the losers.
They did it with solar, and they are going to do it with EVs and whatever else. Anyone who actually thinks just private industry in the US or anywhere else can compete with this state sponsored capitalism model is just deluded.
The majority of this steel production is probably going toward the belt and road initiative i.e. railroads, bridges, infrastructure etc. China is in the process of building a new Marco Polo Silk Road in the twenty first century. They are dead serious about building trade with all of Asia, Africa and even Europe.
Chinese steel production somewhat mirrors car production. Shockingly, the US car production stood at just over 3 mil, also perhaps mirroring steel production:
https://ceoworld.biz/2018/11/20/worlds-top-20-largest-passenger-car-producing-countries-in-2017-million-units
The Chinese overcapacity, after Trump’s tariffs, seems to be washing up in the EU.
It would be interesting to know what % of production is rebar, especially in China, India, and Vietnam.
It’s China’s insatiable thirst for iron ore and coking coal that keeps Australia out of recession.
If global demand for steel falls, Australia will be one of the first casualties.
The Aussies have no one to blame but themselves for becoming dependent on China. However… I’m sure they”l pull through… hey, maybe they’ll vote in a competent government with long term planning.
Well… In the US PAIN is returning home!
“Pain has returned to the US steel industry despite the tariffs put on imported steel last year that were designed to help.
Late Tuesday US Steel announced it will idle two of the blast furnaces where it makes steel, one in its flagship mill in Gary, Indiana, near Chicago, the other in Ecorse, Michigan, near Detroit. The idled furnaces will cut production by about 200,000 tons of steel or more a month, the company said.
“We will resume blast furnace production at one or both idled blast furnaces when market conditions improve,” said the company.”
In a trade system that has so many ways to dodge tariffs, it seems really dumb to use them to try to achieve something meaningful!
The only way to mess up with China is to drastically REDUCE CONSUMPTION! Something that even the LA tent owner doesn’t want to even think about it!
WHY CHINA CAN PRINT 3 TRILLION YUAN A YEAR WITHOUT HYPER INFLATION ?
If Trump wish to crash China economy, all he need to do is just to cut off US dollars supply to China. Here is why in simple explanation with no need complex rocket science.
Do you know why China able to print more than 3 trillion Yuan a year for the past 5 years, without much inflation ? China has been printing more than 1 trillion Yuan since 2005.
China able to print such huge trillions of Yuan yearly, with minimum inflation, is because China have US$300-400 billion trade surplus with USA every year.
In addition from 2000-2014, China have accumulated more than US$3.5 trillion in forex holdings overseas. This included US$1.3 trillion in US Treasury bonds making China the largest owner.
Therefore trillions Yuan China printed yearly are actually supported by China trillions in forex holdings and billions in yearly trade surplus.
This trillion Yuan printed every year, allow China to pay for all the expensive infrastructure, such as high speed railway network system, big dams, huge wind turbine farms, country wide telecom infrastructure, vast road network, south to north water transfer canal project,etc.
Also China was using the trillion Yuan printed to subsidise exporters such as Huawei, ZTE, etc.
China able to invest and build such giant infrastructure projects WITH NO NEED to depend on IMF, World Bank and foreigners investment. Don’t you think this is very amazing ?
I have discuss this with very brilliant and knowledgeable economists in the internet forum, and they all did not believe my analysis and observation.
But these so called brilliant academic also unable to explain why and where China get all the billions of Yuan or USD to build such advanced infrastructure for the past 10-15 years.
So there are no secrets of China economic success. It is all due to trade surplus earned from USA, and printed trillions Yuan to invest in their huge infrastructure projects, and subsidise exporters, to ensure can continue to earn trade surplus with US.
China USD300 billion plus trade surplus with USA every year, was used to print trillions Yuan and used it to subsidise many industries and the biggest one is steel industries. That is why China is able to over production in all essentials products that are needed for industrialisation.
Americans consumers are the real suckers all along. None of them benefit from trade with China.