Thomas Gibson, president and CEO of the American Iron and Steel Institute testified today before the Senate Banking Committee’s hearing on “Evaluating the Financial Risks of China.”
Gibson highlighted global steel overcapacity, market distortions created by China’s state-controlled steel industry and China’s market economy status, among other issues. The committee is chaired by Sen. Richard Shelby (R-Ala.), and the ranking member is Sen. Sherrod Brown (D-Ohio), both of whom represent states with a strong steel presence.
“The surge in imports is a result of foreign government interventionist policies that have fueled global overcapacity in steel, more than half of which is located in China,” Gibson said. “This has led to increased imports of dumped and subsidized Chinese steel in the U.S., which have injured the American steel industry. While China is not the only source of the problem, the overcapacity in China is the greatest challenge facing the global steel industry today.”
Gibson said with China’s domestic steel demand declining, the Chinese steel industry has increasingly relied on exports to consume surplus production. Chinese steel exports rose to 112 million metric tons last year, and through May of this year Chinese producers exported 46.3 million metric tons of steel to the world.