Excessive capacity remains a topical problem in the steel industry

Steel manufacturers in China and the rest of the world need to make more efforts to reduce overcapacity in the steel industry. According to Guido Kerkhoff, CEO of ThyssenKrupp AG – Germany.

While China has made good progress in reducing overproduction, there is room for even greater reductions. Kerkhoff told reporters in a group interview during a visit to Shanghai. The world’s largest steel-producing nation has reshaped the industry over the past three years by closing some factories. And by tightening environmental controls.

„There is still overcapacity worldwide.” And the reduction „must continue” not only in China, but also in Europe and the rest of the world, he said.

China’s steel exports have fallen to their lowest levels in five years. Consolidating the sector’s recovery after a devastating crisis at the end of 2015. While the industry has enjoyed a relatively mild year, risks are rising amid global trade tensions in which steel has been a prime target.

Regions reducing overcapacity in the steel industry

Asked which regions need to take the biggest measures to reduce capacity. Kerkhoff noted that China produces about half of the world’s steel. And that the problem must be approached according to that dimension. Europe has also taken action, he said, including through ThyssenKrupp’s joint venture with Tata Steel, which has created the region’s second-largest producer.

Tariffs on steel imports imposed by President Donald Trump earlier this year triggered inflows into Europe, Kerkhoff said.

„As a company we don’t export much to the U.S. and the grades we sell are often products that aren’t made there, so our customers remain loyal,” he said. The material that would have arrived in the U.S. enters Europe in one way or another. We see volumes from Turkey and Russia growing in the European market.”

Article source: https://www.bloomberg.com/news/articles/2018-10-27/global-steel-industry-needs-more-curbs-thyssenkrupp-ceo-says