Posted on 19 Jun 2024
The European Union's imposition of countervailing duties of up to 38.1% on imported electric vehicles (EVs) from China could significantly impact China's automobile production, further impacting steel coil consumption. Although the auto industry accounts for only 5.5%-6.5% of China's total domestic steel consumption, any drop in auto production critically affects hot-rolled coils, cold-rolled coils, and hot-dip galvanized products.
Despite strong domestic EV sales, driven by a consumer shift from gasoline to electric vehicles, overall car sales growth is limited due to stagnant household incomes. According to Chinese customs, auto exports remained robust in May, rising 30% year-on-year to 569,000 units. However, many unsold Chinese cars are stockpiled at European ports, indicating potential demand is already saturated.
Industry experts warn that European countervailing tariffs could further weaken China's auto exports. Since May, orders for automotive steel products and parts have declined. If China's automobile production growth halts or reverses, cold-rolled and hot-rolled coil markets may face increased downward pressure.
Source:Yieh