China’s Ministry of Commerce said that the claims it was dumping steel in Europe ought to be put to the World Trade Organization (WTO). The statement came after Chinese ministry showed concern over the reports stating that the European Commission (EC) was getting ready to enforce obligations on imported Chinese steel.
The Ministry of Commerce’s spokesman indicated that WTO members should satisfy their treaty commitments and stop using “surrogate countries” to seek further anti-dumping claims. The European Commission is ready to impose temporary duties at the end of this month on Russia and China. According to a report, the commission will charge 26% duties on Russian steel and 16% on Chinese steel after its investigation accused both the countries of steel dumping. However, Reuters indicates that the duties could last for five years.
In a statement, Ministry of Commerce stated: “The global steel industry is facing over-capacity, and the Chinese government is willing to discuss in good faith with WTO members to create a fair, just and predictable international market environment.”
China is the world’s second biggest economy and is also one of the heavyweights in steel production. Because of an economic downturn in the nation, the steel demand diminished and commercial enterprises faced serious misfortunes. In addition, the hindrances confronted as a consequence of crumbling steel demand together with a monetary log jam brought about China’s steel yield to decay by more than 12% in the previous two months.
In such seasons of instabilities, the nation’s primary objective is to build its export volume to cover the overproduction. In 2015, China’s exports developed more than 20% to 112 million tons. As a result, the Chinese steel swamped the international market, which resulted in the lower prices of the commodity. Because of this price issue, trade protectionism came into the spot light. According to a report, last year the Chinese companies, which participated in steel trading around the world, faced more than 37 lawsuits, most of them on anti-dumping
grounds. The US has already imposed heavy import duties on Chinese steel imports. In addition, China’s steel industry dismal performance in 2015 caused serious damages to the leading steel producers around the
globe as well as in the country.
The commodities prices are expected to remain on a lower side especially iron ore, a major component required for steel production. The main reason behind this downfall is directly related to Chinese economic slump. In recent years, China’s industrial output isn’t showing prospering results.