China’s steel demand will remain firm despite the country’s escalating trade war with the United States, and any efforts by Washington to “sabotage” the Chinese economy will not succeed, the head of China’s steel association said.
“The U.S. wants Chinese demand to go down but the U.S. doesn’t have the ability to command the Chinese economy,” Liu Zhenjiang, president of the China Iron and Steel Association, told Reuters on the sidelines of an industry conference.
“The U.S. wants to sabotage the Chinese economy but China is in charge of its own economy.”
China on Tuesday imposed fresh tariffs on $60 billion worth of U.S. imports, retaliating soon after the Trump administration slapped tariffs on $200 billion in Chinese imports as the trade war between the world’s two largest economies escalates.
Liu said steel demand in China, the world’s largest consumer of the metal alloy, will remain stable despite the trade spat, supported by increased infrastructure spending such as urban rail projects.
“It’s hard to see a big jump in (demand) from the property market, since there are some controls from the policy side,” he said.
Plans by the cities of Shenzhen, Suzhou and Changchun to build 44 subway lines totalling about 1,600 km (1,000 miles) are estimated to require about 80 million tonnes of steel, accounting for 10 percent of China’s annual steel demand, according to Reuters calculations based on industry standards for subway design.
“The current financial risk is triggered by the U.S. and it’s a man-made problem,” said Liu.
But some Chinese steel producers are opting for caution, limiting exports to overseas markets amid the trade dispute.
“It’s hard to do export business,” said Zhang Sanjian, board chairman Angang Group International Trade Corp.
“Our export volume has already declined and we have reduced our proportion of exports (to total sales),” said Zhang.
Last month, Baoshan Iron and Steel, China’s biggest listed steelmaker, said it expects to reduce its exports to the United States in the second half of this year.
China’s steel exports fell 13.1 percent to 47.2 million tonnes from January to August.