China unlikely to be global steel export hub, Voestalpine ceo says

China’s weak cost position will keep it from becoming a hub for global steel exports, Voestalpine ceo Wolfgang Eder said.

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“On a global comparison, the cost competitiveness of China, like the competitiveness of European steelmakers, clearly is significantly weaker than our competitors from Russia, Brazil, Australia and South Africa because they have high-quality and cheap ores, coal and energy,” he told Steel First in recent interview in Shanghai.

The cost of transportation will more or less eat up any profit from steelmaking if China depends on exports to drive steel volumes, he added.

Eder, who is also vice-chairman of the World Steel Assn, believes that building growth on exports means to destroy value for Chinese mills since they cannot profit from exporting commodities.

“Exports only work for the absolutely high end, but not for the majority of commodities,” he explained.

“It’s not my turn to advise anybody. My hint is be careful in building up more capacity, because this puts more and more pressure on domestic production,” Eder warned.

This in turn would weaken the entire industry, he added.

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