Interesting….

Steel imported from China, amounts of which are very limited, has little to do with the predicament of the UK’s steel industry. In both volume and value, steel from China makes up only a fraction of the UK’s total steel imports.

In 2015, for example, of the UK’s 6.66m tons of imports, only 11pc, or 760,000 tons, were from China. If put in value, that was $457m, only 7.6pc of the $5.98bn total. Moreover, steel products from China are mostly low value-added, such as ordinary steel rods and plates, which Britain no longer makes and would have to import from other countries anyway.

Therefore, imports from China have no impact upon the British steel market.

Don’t know how true it is, my industry knowledge runs out rather before this point. But seems reasonable at least.

12 thoughts on “Interesting….”

  1. http://www.nass.org.uk/Publications/Publication4077/UKSteelKeyStatisticsGuide2015.pdf

    Page 12, Imports from Asia are about 1/6 of total UK imports. Japanese and Koreans export nearly as much as China page 14.

    60% of imports of iron and steel come from the EU.

    Of course, the Chinese are responsible for the glut and thus the UK crisis – their excess drags down global prices and the location of the exporters doesnt change (everyone cuts their prices to match – they need the cashflow to cover fixed costs).

  2. Rob

    No, the Chinese are responsible for this. But waves of this have occurred over the past two centuries as better big blast furnaces are built around the world in countries going through development.

  3. this ” imports from China have no impact upon the British steel market” is nonsense isn’t it? there is a global market. if country A starts producing lots of stuff and selling it cheaply on global market, that is responsible for what happens in countries B to Z, even if country A only actually supplies stuff to countries A to P

    same applies to oil and similar

  4. So Much For Subtlety

    It is not often you hear people saying steel is fungible.

    Not the most obvious liquid asset[1]

    But who cares? The only way steel will survive in the UK is by embracing new technology. That means a lot of capital. That means British people need to save more – and more Unions need to be busted. Better to make another Wallace and Grommit film.

    [1] OK that is not what it means. But I really wanted to make that joke anyway.

  5. I sneeze in threes

    So the Chinese shouldn’t sell below cost as that’s dumping whereas the Welsh should (they aren’t making a profit) because of jobs and strategic concerns?

  6. Luis

    Yes, I used to have to explain this to idiots who used to complain when tariffs on imports were lifted and foreign market share remained virtually unchanged – the effect all comes in the price not where the stuff comes from. (at least in the short run).

  7. Question for Tim inspired by SMFS: Are low interest rates responsible for underinvestment?

  8. You wouldn’t generally think so, no. Might be responsible for undersaving but that’snot a problem anyone’s identified sad plaguing us.

  9. So Much For Subtlety

    Tim Worstall – “You wouldn’t generally think so, no. Might be responsible for undersaving but that’snot a problem anyone’s identified sad plaguing us.”

    I would think at the moment we are over saving – the world as a whole that is. The British probably aren’t.

    I did not mean that it is a lack of capital. I think it is a strong dislike of investing in anything controlled by a Union. Locking up large sums of money in an industry controlled by a union is clearly something British people aren’t dumb enough to do any more. Not without very good reason.

    Any industry with a surviving union, no matter how moderate, is dead or dying in Britain.

  10. I think I’m with Luis Enrique here. Britain’s behaviour as importer (consumer) wouldn’t seem to have much bearing on its success as a producer in a worldwide market place.

  11. “Are low interest rates responsible for underinvestment?”

    At first glance I would say no because one would think businesses paying lower interest rates would tend to grow faster.

    The question is what second order effects are we missing?

    I will throw this straw-man argument out so that it can be torn apart.

    With low interest rates the average Joe has no reason to put his money into a bank. Instead the money will go into driving up prices on a commodity with a higher perceived value, such as gold*. This would lead to a lower Mv(I hope I used that correctly, if not please correct me) and less funds available for business needs.

    *I was going to say housing but a brick of gold in the wall safe provides far fewer benefits than a house. I have a gut feeling that the two are fairly equivalent but, at this time, I have no way to state the argument effectively.

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