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China Expected to Export 50 Pct Fewer Steel Billets Next Year

Higher production cost will lower China's export of steel billets by at least 50 percent in 2008, said Qi Xiangdong, vice secretary general of the China Iron and Steel Association.

Speaking at the third Forum on Bohai Bay Iron and Steel Market Wednesday, Qi predicted that steel products will also drop by some 1 percent compared with 2007.

Reasons for the sharp export drop are price rises for iron ore, coal, charcoal and nonferrous metals, he said. The combined effect of these rises is likely to see costs rise for iron and steel enterprises.

He said that China's iron and steel industry has acquired the ability to grow in a sustainable way, but the growth rate will continue to slow next year. By the end of 2007, China's steel output capacity will reach 550 million tons, while higher cost will shift profits to enterprises with industrial advantages.

Possible rises in interest rates and the state's macro-control on resources will also impact the export of steel and steel products, he added.

The international steel billets market may feel the impact of China's export drop, he said.