TOKYO: The Group of Seven (G7) nations should assist China with their experience to cut excess steel capacity instead of criticizing the world's top producer for the current global glut, said a senior official at Japan's Nippon Steel & Sumitomo Metal Corp.
World steel producers claim China has been dumping excess output abroad as consumption at home wanes and, on Tuesday, the United States slapped punitive duties on shipments from China.
The latter, however, says it has done enough to reduce capacity and blames global excess and weak demand for the sector's woes.
"Criticizing China alone will invite their opposition. Europe, US, Japan should offer their experience of cutting capacity in the past to make it easier for China to tackle the problems," Nippon Steel's executive vice-president, Toshiharu Sakae, told Reuters in an interview on Monday.
The G7 nations plan to take steps to combat the global steel glut when they meet on May 26-27 in Ise-Shima near Nagoya in Japan, a major car production and steel manufacturing centre, according to a draft text obtained by Reuters.
Just last month, China, which manufactures half the world's steel, and other major producers failed to agree on measures to address the overcapacity crisis.
Sakae believes the G7 countries can "provide China with useful experience from the past" and help it curb overcapacity.
"Europe, the United States and Japan all experienced the transition to stable growth from high growth that led to overcapacity and have experience in reducing that."
China, with a steel capacity surplus at around 400 million tonnes and average utilisation rates under 70 percent, has vowed to cut overcapacity by 100-150 million over the next five years.
But its output hit a record in March as rising prices at the time and better margins prompted mills that had been shut or suspended to resume production.
Hot-rolled coil and sheet prices in Asia rose to around $410 per tonne by late April from around $290 in November-December, partly due to the injection of speculative funds, Sakae said.
Sakae's interview was a day before the United States slapped duties of more than 500 percent and 71 percent on cold-rolled flat steel imports from China and Japan, respectively.
Among Japanese producers affected by the US move are Nippon Steel and JFE Steel Corp.
A spokesman at Nippon Steel, the world's No.2 steelmaker, however, declined to comment on this when contacted on Wednesday.
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