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China's steel exports seen near record next year
[SINGAPORE] Chinese steel is still expected to flood the global market next year, according to Fitch Ratings Ltd., increasing the risk of trade tensions and potentially throwing a wrench in the Group of 20's effort to stem a world glut.
Shipments will probably stay at about 100 million metric tons as "apparent" consumption is set to be flat at 700 million to 705 million tons and capacity rationalization is slow, Fitch said in a statement dated Nov 16. The country sold a record 112.4 million tons overseas in 2015, customs data show.
"Exports should remain high in 2017 as Chinese producers continue to benefit from a cheaper yuan and lower raw material prices," the company said.
The forecast for consumption reflects decelerating property growth, stable expansion of infrastructure investment, and a favorable outlook for automobile and appliance demand, Fitch said.
China, which produces about half the world's steel, agreed at the Group of 20 meeting in September to cooperate with other major economies on tackling excess domestic supply. Chinese mills are still producing more this year after a credit-fueled property boom lifted demand. The yuan is expected to weaken against the dollar in the first half of next year following Donald Trump's surprise victory in the US presidential election.