OTTAWA—Two Canadian steel organizations are banding together to call on Prime Minister Justin Trudeau to fight for a multinational solution to the ongoing global steel glut brought on in part by Chinese steel dumping.
To coincide with Trudeau’s inaugural official visit to China, the Canadian Steel Producers Association (CSPA) and the United Steelworkers union (USW) have penned an open letter to the prime minister, saying he “must act to avert irreversible harm” to Canada’s steel industry.
“Despite recent efforts, the problems of overcapacity in steel and associated increases in the volume of damaging and unfairly traded goods entering the Canadian market persists,” the letter, jointly-signed by CSPA President Joseph Galimberti and USW National Director Ken Neumann, says.
“Massive state ownership of and support for China’s steel sector is the single largest force disrupting established trade patterns and degrading pricing of steel products globally today.”
Trudeau is in Beijing this week ahead of the G20 meeting set to take place in Hangzhou, China next week.
The USW and CSPA say the economic conference is a “unique opportunity to address this issue directly with the nation most responsible for destabilizing the sector.”
The Chinese government has been widely criticized—by the U.S. and EU, among others—for propping up its own steel sector and flooding the market with cheap steel. The state subsidies then make other producers’ steel less competitive.
Dumped steel has been a persistent issue in Canada as well. Most recently, the Canada Border Services Agency launched an investigation into concrete reinforcing bar imports from six countries, while rebar from China is currently subject to a special import measure.
Compounding wider industry uncertainty, the country’s two main steel producers, Essar Steel Algoma and U.S. Steel Canada are currently undergoing court-supervised restructuring.
“The price deterioration and market instability associated with illegal trade have contributed significantly to our industry’s challenges,” the letter says.
According to the CSPA and USW, global steel overcapacity has risen to approximately 700 million tonnes per year—while 425 million tonnes of that surplus is being produced in China alone.