Blaming China for UK steel woes is misleading

Reports in the British media which pile blame on China for the difficulties of UK steel plants are misleading the public, according to analysts.

Following news that Tata, the Indian industrial giant, wants to shut its steel mills at Port Talbot and elsewhere, media reports have been finger-pointing at China, alleging it is flooding the market with steel products at artificially low prices, supported by subsidies from the Chinese government.

Steel prices have fallen in recent years due to a crash of almost two-thirds in the last five years in the price of iron ore.

According to Statista, a Hamburg-based statistics company, the average price of one metric ton of ore was 55 U.S. dollars in 2015, down from the peak of 168 U.S. dollars in 2011.

Just like the meltdown in the price of crude oil leading to cheaper gasoline, the slump in iron ore prices triggered the downfall in steel prices, said Lu Xiaoming, a steel industry analyst with the China Economic Information Service.

Although China produces nearly half of the world's steel, 88 percent of its products are consumed domestically, and its exports are not large enough to dominate international market prices, Lu said.

Source: XINHUA