Sao Paulo, Brazil, 23 Feb – the reduction of government support for exporting steel produced in China will benefit the world’s steelmakers, namely those in Brazil, according to Rodrigo Barros, a steel analyst from Unibanco Corretora.
Cited by Brazilian newspaper, Estado de Sao Paulo, Barros said that the forecast was for the Beijing government to reduce the amount of credit returned to producers from the 17 percent they pay when they export their steel.
Renato Vallerini, sales director for the foreign market of the Usiminas-Cosipa System, said that although Brazilian steelmakers were not affected by direct competition from Chinese steel companies in Brazil, the rapid growth of exports from China in 2006 reached markets that are also targets for Brazilian steelmakers.
According to Vallerini, the reduced assistance from the government will have the effect of at least maintaining Chinese exports at current levels and they may even fall by the end of the year.
In 2006, China’s steel production totaled 417 million tons, or an annual growth rate of 18.5 percent. From being a steel importer China has become an exporter of the product. In 2006, China exported 43 million tons of steel, which was more than Brazil’s total production. A year before, the country did not export any steel at all.
On importing 19 million tons of steel, China had net exports of 24 million tons. Last year, the Latin American Institute of Iron and Steel (ILAFA) warned about the risk of China’s super production altering the world steel market. (macauhub)