According to statistics released yesterday by the State Economic and Trade Commission, China exported 1.20 million tons of steel during the first quarter, a 33.9 per cent decrease compared with the same period last year.

In contrast, the nation's steel imports increased by 17.5 per cent year on year to 4.9 million tons during the first three months, the commission said.

Jia Yinsong, a commission official, said: "The reverse import and export scenario has put great pressure on the domestic market and steel industry."

In January and February, the steel industry's profits decreased by 46.7 per cent to 1.4 billion yuan (US$169 million) from a year earlier as result of a price slump on the domestic market, according to the commission.

The export drop mainly resulted from trade conflicts between the world's major steel-producing countries, Jia said.

"China is one of the countries to have been hardest hit by the trade conflicts," the official said.

On March 20, the United States began slapping tariffs of up to 30 per cent on steel imports from a bevy of countries - including members of the European Union, Australia, Brazil, China, Japan, Russia and South Korea - to aid its ailing steel industry.

Jia said: "Difficulties will mount for China's steel exports for the rest of the year."

He added the commission and the China Iron and Steel Association - which groups together major Chinese steel manufacturers - are studying countermeasures against the US restrictions.

Low price levels on the world market due to oversupply also squeezed China's exports, he said. "Evidence has emerged of the substantial impact of steel imports on the domestic market."

Jia attributed the steel-import jump during the first quarter largely to China's steel tariff cut and abolition of its import quota under its WTO obligations. The nation has slashed its tariffs on steel imports from 8.1 per cent to 5.1 per cent.

The world's major steel-producing countries have targeted the large Chinese steel market more strongly amid increasing competition driven by the trade conflicts, according to Jia.

China's steel imports reached 2.1 million tons in March, the highest monthly total in two years, according to the commission.

"We will feel much more pain from increasing steel imports during the second quarter of this year," Jia said.

Steel output of the country during the first quarter reached 41.3 million tons, an increase of 20.5 per cent over the same period last year, according to the commission.

(China Daily April 17, 2002)