China steel exports poised for record high, risking backlash

China's steel exports are set to hit an all-time high this year, defying predictions that unprecedented trade barriers would drive down shipments and threaten to provoke an even fiercer protectionist backlash against the world's dominant producer.

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Exports will grow 4% to 9% this year to hit between 115 million and 120 million metric tonnes, according to forecasts from 11 analysts, all of whom had forecast earlier this year that exports would fall.

Record exports from China, which produces more than half of the world's steel, underscore how its steelmakers and traders need new markets for metal that can no longer be absorbed at home, where consumption peaked in 2020 before the collapse of the property market.

The drive also reflects worry among steelmakers that trade barriers will keep rising. Better to sell as much as possible now, the thinking goes, according to three analysts and a trader who spoke on condition of anonymity given the sensitivity of the issue in China.

But that fear risks becoming self-fulfilling as the export drive reshapes global flows and spurs countries to close off their markets to support domestic steelmaking.

Some 54 tariffs and other trade barriers have been initiated against Chinese steel from 2024, more than the total between 2019 and 2023, according to China Trade Remedies Information. Analysts say more exports will encourage further curbs.

The European Union said earlier this month it would find new ways to curb steel imports. Mexico on Thursday unveiled a plan to raise tariffs on Chinese imports, including steel.

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