China's recent surge in exports is raising concerns of oversupply in global markets. This situation has the potential to depress steel prices and put steel producers in other countries in difficult situations.
In September 2023, China's steel exports to Thailand surged by 60% annually and by 80% to Malaysia. The amount of steel exported to Indonesia doubled, while to Vietnam, it increased by more than fourfold. This increase is putting local steel producers in the region under pressure.
The decrease in prices is negatively affecting the profitability and investment capacity of producers. Some countries in the region are considering protective measures against steel imports from China.
China's 4.5% increase in steel production in 2023, with most of its exported steel products being used in construction and infrastructure projects, makes Southeast Asia one of the most affected regions. Since countries in the region are heavily reliant on steel imports for production, cheap steel from China poses a significant threat to local producers.
To protect the steel industry in the region, solutions such as imposing restrictions on China's steel exports, supporting local steel producers through subsidies, and promoting technological innovation and R&D investments are being suggested.
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