The Belt and Road Initiative presents opportunities, with connectivity serving as the means, enabling China’s steel industry to reduce overcapacity by expanding overseas.

As a key province in this year’s steel capacity‑reduction effort, the National People’s Congress deputy, Hebei Provincial Party Committee Deputy Secretary and Governor… Zhang Qingwei Recently, at the Two Sessions, it was stated that the steel industry structure will be optimized through a “five‑batch” approach, launching a decisive battle to cut excess steel capacity during the 13th Five-Year Plan period. This year, the province will reduce ironmaking capacity by 10 million tons and steelmaking capacity by 8 million tons, vigorously accelerating the elimination of outdated production capacity.

　　Zhang Qingwei stated that, during this window of opportunity for policy and market adjustments, we will accelerate the transition from old to new growth drivers and swiftly navigate the period of structural pain. Meanwhile, Hebei has set a five-year cap on its steel production capacity at 200 million tons. To achieve this target, Zhang Qingwei noted, it would amount to shutting down or consolidating roughly 60 percent of the province’s existing steel enterprises, with comprehensive plans in place for workforce reemployment. Over the past two years, Hebei has already begun to identify and refine effective approaches in this regard.

　　Recently United States The Ministry of Commerce has issued an announcement deciding to initiate anti-dumping and anti-subsidy investigations into stainless steel sheet and strip originating in China. Against the backdrop of overcapacity in China’s steel industry, whether China can sustainably expand its steel exports will be one of the key issues drawing market attention.

　 　Go out to seize opportunities.

　　2015 was the most sluggish year for China’s steel industry in recent years. Steel material Prices have hit historic lows, plunging the industry into an unprecedented crisis. According to data from the National Bureau of Statistics, China’s crude steel output in 2015 totaled 803.8 million tons, down 2.3% year on year—the first decline since 1982. Nevertheless, annual export figures were remarkably strong.

　　According to customs statistics, in 2015 China’s cumulative steel exports reached 112 million tonnes, up 19.9% year on year, setting a new all-time record. In September alone, exports totaled 11.26 million tonnes, marking the highest monthly export volume on record. This export volume slightly exceeds Japan’s total crude steel production for the entire year of 2014 and is 1.4 times that of the United States. Germany 2.62 times that of.

　　“China’s steel exports have grown rapidly, largely owing to the comprehensive advantages of its steel products in terms of cost, product specifications and varieties, as well as volume.” Competitive Advantage “Compared with other countries, it enjoys clear market competitiveness. Overall, in 2015, China’s steel exports to emerging economies in Asia, the Middle East, and Africa, as well as to developed economies in Europe, remained robust, with Asia being the primary destination for Chinese steel shipments,” said Du Hongfeng, an analyst at SteelHome, in an interview with a reporter.

　　With the convening of the Two Sessions, “ Belt and Road Initiative “Belt and Road” construction has become a hot topic at this year’s Two Sessions. As localities actively implement the national “Belt and Road” strategy, the steel industry and steel traders are presented with significant opportunities, enabling the steel sector to expand overseas in tandem with the initiative. Against the backdrop of a deep industry downturn, domestic steel companies are once again turning their attention abroad.

　　 Iran It is an important country along the Belt and Road, and in the future will continue to advance cooperation in areas such as infrastructure, connectivity, industrial capacity, and energy within the framework of the Belt and Road Initiative. Recently, Sinosteel International (000928, Stock forum ) The Company’s wholly owned subsidiary, China Steel Equipment, has signed a EPC contract with Iran’s BAFGH KASRA Steel Company for a 1-million-ton steel plant project, with a total contract value of RMB 3.108 billion—equivalent to 28.10% of the company’s 2014 total operating revenue of RMB 11.061 billion.

　　According to reports, in recent years, as overcapacity in China’s steel industry has grown increasingly severe, the sector has witnessed a surge in overseas plant‑building activities. In early 2015, China’s major steel enterprises… Maanshan Iron & Steel Group China Metallurgical Group Corporation and Ferrum Corp. have jointly signed a memorandum of understanding to establish a joint venture for a 1-million-ton-per-year integrated steel plant project in Kazakhstan.

　　“Based on the current situation of Chinese steel companies establishing plants overseas, it is clear that they are primarily targeting regions where production capacity is in short supply, iron ore resources are abundant, and labor costs are low—such as Southeast Asia, Africa, and West Asian countries. This approach not only helps absorb excess domestic capacity but also enables enterprises to cut multiple costs, including labor and material expenses.” Haitong Futures Sheng Zhicheng, the project leader of the Finance Department, said in an interview with a reporter.

　　However, Sheng Zhicheng pointed out that everything has two sides. First, when expanding overseas, companies must take into account a host of factors, including local consumer demand, the level of competition, and operating costs. Objectively speaking, environmental and tax policies at home and abroad differ dramatically; for instance, in terms of environmental compliance, the actual cost pressures overseas are far greater than those in China. Moreover, labor‑rights protections and worker‑organization frameworks abroad are considerably more robust than in China, and these considerations also need to be factored into the equation.

　　In other words, when manufacturing steel overseas, it is essential to take cost and profit considerations into account. On the other hand, there is the issue of integration: such projects can create local employment and help ease trade disputes. However, this approach will only be viable if it can meet cost‑effectiveness requirements. This scenario addresses half of the potential benefits—proximity to raw material sources—and from… Brazil According to reports from within China, the local government is encouraging mining companies to proceed with the construction of an iron‑making plant, as a 1‑million‑ton steel mill would generate far more jobs than a 10‑million‑ton iron‑ore project.

　　However, Sheng Zhicheng pointed out that the issue is equally apparent: although raw materials are now sourced locally, steel still needs to be shipped to end‑use markets, where logistics costs are higher. For dry bulk vessels of comparable capacity, transporting the same volume of ore versus steel will inevitably result in a greater cargo weight for ore, leading to higher unit freight rates for steel. Which option is more advantageous remains to be determined.

　 　Anti-dumping investigations are intensifying.

　　“Since steel exports first surpassed 100 million tons in 2015, domestic steel exports in January and February this year recorded their first year-on-year and month-on-month declines in four years. Industry insiders attribute this downturn to persistently weak international demand and the intensification of the European Union’s anti-dumping investigation into Chinese steel products, both of which have led to a marked drop in export volumes. For an industry already grappling with overcapacity, this decline in exports only compounds the challenges.” Hangzhou steel trader Bao… Wenjun He stated during an interview with a reporter.

　　So far, India The United States and Indonesia have both imposed higher tariffs on steel imports from China. Additionally, according to reports, the European Commission officially announced on February 13 that it would launch simultaneous anti-dumping investigations into three categories of steel products originating in China—seamless steel pipes, medium‑ and thick‑plate, and hot‑rolled flat steel—and impose provisional anti-dumping measures on cold‑rolled steel sheet imported from China. This has become a major factor behind the decline in China’s steel export volumes.

　　“Although domestic steel has been steadily exported overseas in recent years, anti-dumping measures abroad have remained frequent, and ‘double‑countervailing’ trade disputes have continued to mount. According to statistics, in 2014 the Ministry of Commerce reported a cumulative total of 72 trade‑remedy cases—double the figure for 2013—and this number further rose to 98 cases in 2015, an increase of 36% year on year,” Du Hongfeng said in an interview with reporters.

　　On March 4, U.S. time, the U.S. Department of Commerce issued a notice announcing its decision to initiate anti-dumping and countervailing duty investigations into stainless steel sheet and strip originating in China. Although the Trade Facilitation Act does not explicitly target China, given that China has become the United States’ largest trading partner and that Chinese exports of steel products to the U.S. are substantial, the legislation is widely viewed within the industry as being designed to impose measures on Chinese steel companies.

　　Since last December, steel prices have evolved from a sharp rebound following a severe oversold correction into a sustained recovery. Sheng Zhicheng notes that, traditionally, inventory hoarding by steel traders has been one of the key drivers behind price increases. However, he offers a different perspective: first, the painful losses incurred by steel traders during their 2010–2015 stockpiling spree have objectively dampened both their willingness and the scale of such hoarding. Second, the number of steel traders has declined sharply—during the sector’s peak, there were more than 200,000 domestic steel traders and over 1,500 sizable steel‑related enterprises. Spot goods Market.

　　Although the trade sector remains cautious, the latest steel PMI reading—49.0% in February—remains below the 50‑point threshold signaling contraction, yet it has risen by 2.3 percentage points from January, marking the third consecutive monthly increase and reaching its highest level since May 2014. In particular, the new orders index, which reflects demand-side trends, and the input prices index, which tracks cost pressures, have both improved markedly, indicating a buildup of positive market factors.

　　“Judging from the recent financial reports released by the four major overseas mining companies, their production costs are below $50 per ton and still have room to fall, which suggests that the pace of capacity expansion will remain sustainable. With imported iron ore prices now exceeding $60 per ton, in the long run, a supply‑demand imbalance—characterized by oversupply—could exert significant downward pressure on steel prices. As for steel exports, if steel prices continue to rise, the current competitive edge will gradually erode; and given the global overcapacity in crude steel production, this will indirectly constrain the volume of steel exported,” Du Hongfeng said in an interview with reporters.