Last year we were being told that China was dumping enough low-grade steel to carpet most of the Home Counties. And, given that China produces half of the world’s steel, they could probably do it.
What was actually happening was that China was keeping its steel production costs artificially low so as to undercut its competition. It’s a process called “dumping”.
So when a country that produces half the steel the world needs and is prepared to protect its home market by selling close to, or actually, at a loss, then the rest of the world sits up and takes notice.
According to UK Steel, Chinese steel producers were losing around US$ 34 a tonne.
Well, despite the prediction of the doomsayers, the Home Counties, as we all know, are still intact.
It’s happening again though. Steel is once more “front and centre” as the Leader of the Free World seeks to protect America’s home steel industry by slapping onerous tariffs on imported steel and aluminium. The media immediately enters a tail spin claiming heavy handed protectionism. Then, when the dust settles (as much as is possible) we learn that the EU along with Argentina, Australia, Brazil and South Korea will be exempt.
Earlier, POTUS had announced his intention to impose tariffs of 25 per cent on imported steel and 10 per cent on aluminium. These penalties were primarily aimed at China as a reprimand for flooding the world with cheap metals.
As with all these headlines, give it time and the real story begins to emerge. And, usually, it isn’t so dramatic. Actually, it is only right that the UK should be exempt from these heavy tariffs and as UK Steel (our industry trade body) recently pointed out to Liam Fox, Secretary of State for International Trade, “It is abundantly clear to any observer that UK exports to the US present no threat to US national security and moreover, no threat to the US steel industry itself.”
And, talking of UK Steel. Although they are not large, as the trade body representing our industry, they are incredibly efficient and dedicated.
They successfully lobby the government on all steel industry related matters and in 2017, had over 30 meetings with government ministers and were successful in pushing the government to increase the proportion of steel used in its own infrastructure projects.
I’m not going to tell you that UK Steel is continually pressing our government to give the industry clarity post Brexit as you are probably bored rigid by the subject. If, on the other hand you are not comatose by Brexit, well, now you know what UK Steel is up to.