Trade frictions continue to heat up Sino-US steel negotiations with little consensus


The two days of the third dialogue between China and the US steel trade ended, and the negotiators have already returned to China.

"I believe the Sino-U.S. negotiations will find a meeting point." When this reporter asked about the progress of the negotiations, the Secretary-General of China Minmetals Chemicals Import and Export Chamber of Commerce Wang Qijiang answered the question on the 9th.

In March and October 2006, there were two dialogues between China and the United States.

This dialogue coincided with the peak of the Sino-US steel trade friction.

In a one-and-a-half-year conversation, the Chinese negotiating delegation represented by Baosteel and the US conducted comprehensive communication on the steel market, industrial integration, production, production capacity, export tax rebates, and policy subsidies of the two countries.

“This is a difficult conversation.” A manager of the China Iron and Steel Corporation’s steel company told reporters on the phone.

Liu Yongchang, deputy secretary-general of the National Association of Industry and Commerce Metallurgical Chamber of Commerce, also believes: “The prospects for the resolution of differences between China and the United States are not optimistic.”

The result of the dialogue is confusing

“Participators in the Sino-U.S. negotiations have returned.” A staff member of the China Iron and Steel Association’s General Department told reporters on the 8th. “The content of the negotiations and the extent to which they are discussed are absolutely confidential and should not be disclosed to the outside world.” The staff categorically rejected interviews with reporters.

Like the China Steel Association, representatives of Baosteel, China Steel, and Shagang, who participated in the negotiations, have all kept quiet about the specific progress of the negotiations.

"I'm not sure about the specifics of the negotiations." Vice President Li Zhimin of Sinosteel Group told reporters.

The silence of the representatives of the parties made the results of the Sino-US steel dialogue even more confusing.

“This negotiation mainly entrusted Baosteel Group as a representative to negotiate with U.S. companies.” Wang Xiejiang revealed to reporters in an interview. “The negotiation prospects are still optimistic.”

Later, the reporter learned from related departments that about 20 Chinese representatives participated in the third dialogue between China and the United States’ steel industry. They were composed of the Ministry of Commerce, the Association, more than a dozen steel mills, two trading companies, and an expert advisory group. . Specifically, it includes representatives from the Ministry of Commerce, the National Development and Reform Commission, the China Minmetals Chemicals Import and Export Chamber of Commerce, the China Iron and Steel Industry Association, and representatives from Baosteel, Anshan Iron and Steel, Wuhan Iron and Steel, Shagang, Minmetals and China Steel. The representatives of the United States include the US Department of Commerce. Representatives of the U.S. Trade Negotiations Office and U.S. industry.

In addition to issues such as the development of the steel market and industry-related policies, iron ore negotiations are also an important part of this dialogue.

Wang Xijiang did not directly disclose the results of this negotiation. However, he repeatedly emphasized that negotiation requires mutual understanding and the interests of any party cannot be maximized. Only when the interests of both sides are peaceful, the negotiation can be successful. I believe that both China and the United States can find a suitable handover point.

Trade friction continues to heat up

It is now at the peak of the Sino-US steel trade friction. This war without "smoke smoke" dates back to half a year ago.

In response to all kinds of unreasonable accusations made by the United States against the Chinese steel industry, in May 2007, the steel delegation of China Minmetals Chemicals Import and Export Chamber of Commerce visited the United States and published a white paper. Subsequently, on June 1, the American Iron and Steel Association, the Iron and Steel Manufacturers Association, and the North American Special Steel Industry Association expressed that they still had "completely different opinions" on some "key issues" in the "white paper."

On July 30th, a report of the US steel industry accusing the Chinese steel industry of relying on subsidies from the government was released. In this regard, China did not show weakness. On July 31, the Minmetals Chamber of Commerce issued a statement on “Some Issues Concerning China’s Iron and Steel Industry and Trade”. It refutes the US views one by one, and proves by a large number of facts that China’s steel exports are not exported to the United States. The steel industry poses a threat, and the development of Chinese steel companies is entirely market behavior.

“The frequent and frequent steel dialogues between China and the United States are mainly caused by the protectionism of the United States against its iron and steel companies,” said Min Min, an associate researcher at the National Information Center.

In view of the ever-increasing frictions between the two countries’ steel trade, the U.S. government requires the two countries to establish a long-lasting dialogue mechanism for steel.

Before the birthday of the Secretary-General of the China Iron and Steel Association, Luo Bing said: “We insist on using dialogue and negotiation to solve problems, whether it is the United States, Europe or South Korea; in addition, if any party takes anti-dumping measures and related measures against China, we are ready to use them. Legal means to safeguard their own interests."

“In fact, the Ministry of Commerce has now established a dialogue mechanism to respond to various issues raised by the United States at any time,” said Wang Minjiang. As the trade friction between China and the United States continues to heat up, both China and the United States have already begun looking forward to the next dialogue.

Reduced steel prices

“If steel prices fall in the second half of the year, this is indeed a good opportunity for development for automobiles and home appliances.” Zuo Xiaolei, chief economist of Galaxy Securities, said in an interview.

“This may be a good news for real estate, automobiles, home appliances, manufacturing, and other related industries,” said Liu Yongchang, deputy secretary-general of the National Association of Industrial and Commercial Metallurgists.

Last week, the steel sector rose strongly. On August 9, the shares of Guangzhou Iron & Steel Co., Ltd., Angang Steel, Baosteel Co., Ltd. and Liugang Steel Co., Ltd. rose sharply. As a result, the sectors such as coal, petroleum, non-ferrous metals, and real estate also stabilized and recovered, and the performance of the real estate sector was particularly strong.

Compared with the joys of real estate, automobile and other industries, “the shipping companies are likely to face challenges from the steel companies in the second half of the year”. According to Min Min, an associate researcher at the National Information Center, more and more steel companies operate their own shipping.

In the face of the "threat" that may come, Wang Hongxuan of Sinotrans Tianjin Branch told the reporter that "The steel giant's maritime investment will not change the status quo in the shipping industry and it should not be a problem."

“The new export tax rebate policy has a certain inhibitory effect on resource exports, and the situation that the price of raw materials such as steel in our country will rise too quickly will ease,” said Fu Peizhao, vice president of the Automotive Branch of the China Chamber of Commerce for Import and Export of Machinery and Electronic Products, a few days ago.

The rise in steel prices has increased the income of upstream companies and also increased the product costs of downstream companies. If the downstream company's production capacity is already in surplus, then the downstream company simply can not get the same price increase ability as the upstream company, the downstream companies will have to swallow the bitter fruit of upstream product prices, the profit margin will be further reduced. "A typical example is the previous domestic appliance companies can't do anything to increase the price of steel." According to Min Min, an associate researcher at the National Information Center.

Fu Peizhao also pointed out that these years, steel prices have been rising, while the automotive industry is using large steel, the auto industry is increasingly intensified, the vehicle prices fell and fell again, steel prices have brought great pressure on the automotive industry. Now that the export tax rebate rate has been adjusted several times, it has dropped to a very low level, which is good for alleviating the pressure on automobile production costs.

In the past, some auto companies had been pursuing “exports” and faced the constant rise in raw materials, even at the expense of “making money and losing”. However, the country lowers the export tax rebate rate for steel products, and the rise in shipping prices will shift the focus of the iron and steel companies from exports to domestic sales. This will increase the competitiveness of the domestic market and reduce the overall price of steel, thereby effectively reducing the cost of bicycles.

"The automobile industry may benefit from using it as a large steel product, and it will eventually benefit car users," said Dongfeng Nissan's marketing department Mr. Yang.

Like the automotive industry, large steel users such as machinery manufacturing, real estate, and home appliances will also benefit from the reduction in steel prices.

"Machine manufacturing industry as a large steel user, 60% of the cost comes from steel." Liu Yongchang said, "The reduction of steel prices in the second half of the year will bring business opportunities to the development of these steel companies."





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