Capacity Reduction Will Happen Later Rather Than Sooner, Says Consultant
10/19/2016 - By the time the industry closes the books on 2016, China likely will have exported about 120 million tons of steel, Steel-Insights President Becky E. Hites said on Wednesday.
Speaking during the 20th annual Smithers Apex Met Coke World Summit in Pittsburgh, Pa., Hites said China is, however, targeting a lower annual export volume by 2020 -- around 80 million tons.
"We're going to have to adjust," she said. "The world is not going to revert back to what we know."
Hites also said that those who are hoping China and the world's other steelmaking nations will move quickly to eliminate excess capacity shouldn't expect swift action.
"All of our motivations are not aligned. We know what needs to happen for the benefit of the world, but who can afford to take the financial hit? And the truth of the matter is, nobody can," she said.
"Historically it's taken decades for the industry to consolidate. Even in the U.S., it took 30 years. And we want China to do it on a dime."
Hites said that as a command economy, China could pull back its steel industry, if it chose to do so. But the question is whether it is ready, she said.
"I don't think it’s going to happen anytime soon.
"We're going to have to adjust," she said. "The world is not going to revert back to what we know."
Hites also said that those who are hoping China and the world's other steelmaking nations will move quickly to eliminate excess capacity shouldn't expect swift action.
"All of our motivations are not aligned. We know what needs to happen for the benefit of the world, but who can afford to take the financial hit? And the truth of the matter is, nobody can," she said.
"Historically it's taken decades for the industry to consolidate. Even in the U.S., it took 30 years. And we want China to do it on a dime."
Hites said that as a command economy, China could pull back its steel industry, if it chose to do so. But the question is whether it is ready, she said.
"I don't think it’s going to happen anytime soon.
