Low-priced Chinese stainless steel exports impacting global markets

Japan Metal Daily: China's low-priced steel exports, including stainless steel cold-rolled sheets, are increasingly impacting global markets. Imports to Japan have surged significantly since 2021, peaking in 2022 and 2023. Since April, the situation has intensified, bringing to the fore longstanding concerns about China's surplus supply at "unfairly low prices."

Amid worsening market conditions and heightened competition, major Chinese stainless steel companies have struggled. Fujian Fuxin Special Steel ceased operations last year, and Jiangsu Delong, the second-largest group in China's stainless steel industry, went bankrupt this year. In Malaysia, Bal Stainless Steel, a cold-rolling specialist, also had to suspend operations due to the Chinese market's influence.

The recent bankruptcies and challenges in finding buyers underscore the severity of the situation. China's stainless steel industry, despite strong domestic demand, is weighed down by excess capacity. Historically, when the global stainless steel industry has faced oversupply issues, it has undergone structural reforms, such as with European manufacturers consolidating into major groups such as Outokumpu, Aperam, and Acerinox. Similarly, Japan's stainless steel industry underwent significant restructuring in the early 2000s.

China's stainless steel sector reached a key milestone in 2020 when Baowu Steel Group acquired Taiyuan Iron and Steel Group to bolster its stainless steel operations. However, structural reforms in China are still ongoing, and future developments will be closely monitored.