2024.11.06

According to Xinhua News Agency, Republican presidential candidate Donald Trump announced his victory in the presidential election in the early hours of the morning. "With Trump's victory in the election, China's steel prices may face greater downward pressure, and domestic steel manufacturers could suffer more severe losses than this year," said Ge Xin, deputy director of the Lange Steel Research Center, in an analysis for reporters. This is because Trump is expected to adopt more aggressive measures against China. Although only a small portion of steel products are directly shipped to the United States, resulting in a relatively minor direct impact on China's steel exports, Trump may increase tariffs on downstream steel-using products from China, such as construction machinery, household appliances, and new energy vehicles.

Since the beginning of this year, domestic steel demand has remained sluggish, making it extremely difficult for steel production and steel trade circulation enterprises to operate. The total profit for the month was 1.2 billion yuan, a year-on-year decrease of 60.5%, with a profit margin of only 1.6%. In contrast, the situation for steel exports has been relatively favorable, with strong steel exports to some extent offsetting the adverse factors in the domestic market. Among them, steel exports to ASEAN and GCC countries have grown particularly significantly. Data shows that from January to August, China's exports to ASEAN countries reached 11.8 million tons, a year-on-year increase of 22.5%, with exports to Vietnam reaching 4.1 million tons, an increase of 1.6 million tons year-on-year, growing by 64.9%. Exports to GCC countries reached 1.5 million tons, an increase of 0.6 million tons year-on-year, growing by 66.5%. Additionally, exports to the Southern African Customs Union (SACU) also saw a significant growth, increasing by 23.8% year-on-year.

It is noteworthy that in the first half of this year, then-President Biden of the United States had already announced an increase in tariffs on a variety of Chinese imports, including semiconductors, batteries, solar cells, and steel, among others. Specifically, the tariffs on steel and aluminum products were increased from -% to %. "China's steel exports to the United States have been on a declining trend in recent years, and the direct export volume to the U.S. currently accounts for a small proportion of the total domestic export volume, less than %. In 2022, China exported only 1.16 million tons of steel to the United States, while the total steel exports for the same year reached 66.9 million tons," said the deputy director of the Lange Steel Research Center. The United States is also imposing restrictions on the alloy content of imported steel products, and those that do not meet the standards will be prohibited from export.

In Ge Xin's view, the new tariffs imposed by the United States in the first half of the year have a greater indirect impact on the export of steel, as the latest products subject to tariffs also include electric vehicles and port cranes, which are also major steel consumers. Wu Wenzhang, chairman of Gangzhijia, also told reporters that electric vehicles and cranes use a wide variety of steel products, including cold and hot rolled steel, coated thin steel sheets, bars, Dione steel, and shaped steel, with relatively large steel consumption. If the export of these products is restricted, it will indeed affect the scale of indirect steel exports. In terms of direct steel exports, while reducing exports to the United States, China has been increasing exports to countries along the "Belt and Road," South America, and South Africa.

Ge Xin believes that the newly elected US President Trump may also pressure his allies in the future, demanding higher tariffs or imposing anti-dumping duties on Chinese steel products, which will weaken the demand for Chinese steel products. Wu Wenzhang argues that to cope with the potential for further tariffs, Chinese steel mills may increase exports in the short term, but the negative impact on exports will be significant in the medium to long term.