Outlook
for Asian steel industry is negative for 2017
The outlook for the Asian steel
industry for 2017 has been lowered to negative says US Moody’s Investors
Service in a new report, as global prices of steel collapse across all grades
and utilization weakens.
According
to the recently released report titled – Steel-Asia 2017 Outlook-Weakening
Production and Earnings Keep Outlook Negative – by Moody’s, Asian steelmakers
will not be able to sustain the robust profitability recorded during
mid-2016.
Earnings before interest, tax, depreciation and
amortization (EBITDA), per metric ton is expected to weaken further next year
because of mounting stockpiles of steel causing a glut on the global market.
Further,
protectionist measures in the US by President-elect Donald Trump and his
incoming administration are expected to favour the US domestic steel industry
to the detriment of imports from the Asian market.
The Asian
region’s steelmakers will find it increasingly difficult to pass on rising
raw material costs to customers as demand is expected to slow down during the
course of the year.
The Asian
steel production volumes are likely to decline, the report continued, mainly
due to contraction in steel demand from China-which accounts for
three-fourths of total regional production.
In addition,
trade restrictions imposed by other regions including the EU and US are
likely to further curb exports from the Asian region.
Meanwhile, a
report of the Vietnam Steel Association showed that its member steelmakers
produced 1.48 million metric tons this past October, up 18.6% on-year, with
sales jumping 23% to 1.2 million metric tons.
However, Vice President Nguyen Van Sua of the Association
warned of challenges ahead as cheap steel imports from China would continue
to adversely affect the country’s domestic market.
The total
volume of finished steel products imported from China since the beginning of
2016 has exceeded 7.29 million metric tons valued at US$2.86 billion,
accounting for nearly 60% of the country’s total steel imports in terms of
volume.
Mr Sua also
cautioned that the US Department of Commerce investigation into whether
Chinese steel companies are shipping steel through Vietnam to avoid US import
tariffs may damage steel exports even further over the coming year.
The
investigation comes on the heels of a complaint filed last September by US
steelmakers, and is an escalation of US efforts to stop a glut of China-made
metal from flooding US markets.
The results
of the inquiry could result in new tariffs on steel imported from China via
Vietnam, under rules designed to prevent such a tariff-evading practice,
known as circumvention.
US
steelmakers alleged in their complaint that Chinese steelmakers have shipped
metal to Vietnam, made relatively minor changes to it so that they could then
classify it as Vietnamese and subsequently shipped it to the US under the
lower tariffs charged on Vietnamese steel.
At the heart
of the issue is whether the changes such as adding zinc to make it
corrosion-resistant fundamentally alters the steel enough to make it
essentially a brand-new product that technically qualifies as ‘Made in
Vietnam.’
VOV
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Thứ Bảy, 3 tháng 12, 2016
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