American steel companies have been at the mercy of an unforgiving global market for decades now. One of the major players in this has been China, a country that has been mass producing steel at a rate that is much faster than they have been able to use it. However, this glut of steel may just be catching up with China, making prospects brighter for steel companies all over the world.
China has had an economy that’s been on the rise for a long time, and that has provided a good market for domestic products. Countries that manufacture enough steel for their own country can benefit by a lessened reliance on foreign countries, but reports indicate that China has massively overestimated the supply it has needed. According to this article published by The Motley Fool, China has at least 300 million tons of excess steel.
To get rid of this extra steel, a country will often over-subsidize the sale of these products, essentially creating a product that is so cheap that it creates an unfair market within another country. This is a process that’s known as “dumping,” which refers to the sale of an item to a foreign market that costs less than the price of production.
When this steel is dumped into a country like the United States, it hurts domestic steel companies because the market is obviously going to give a lot of consideration to the cheapest option. Recently, American companies have been filing complaints with the International Trade Commission, hoping to increase duties for this foreign steel. If they succeed, it’s likely that Chinese production will dip, and even a slight decrease would put everyone else in a much better position.
It’s time to start getting excited about the world that American steel can build for the United States. Florida Pipe & Steel is ready to build on the foundation of a successful past in the steel industry. Call us for all of your steel pipe needs!