The Chinese government has reacted strongly to European anti-dumping applications against Chinese steel products, stating China's iron and steel industry would expand to satisfy domestic demand rather than to dominate the global market.

Deputy director of the Industrial Department of the National Development and Reform Commission (NDRC) Xiong Bilin said China would accelerate the closure of out-of-date steelworks and continue to boost the industrial upgrading of steel sector.

He said China had so far eliminated backward mills with an aggregate capacity of 11.44 million tons for iron and 8.73 million tons for steel.

This month, 18 provinces and municipalities will clinch responsibility pledges with the NDRC to advance the closure of out-of-date steel factories.

"If everything goes smoothly, the eliminated capacity for iron would reach 36.66 million tons by the end of this year, and for steel 35.69 million tons," he said.

The China Chamber of Commerce of Metals, Minerals and Chemical Importers and Exporters also released a statement Wednesday, calling the dumping charges by the European Confederation of Iron and Steel Industries (Eurofer) "groundless and not conforming to reality".

"China's rising output and exports of steel products were powered by the demands of domestic and overseas markets rather than the spread in local and overseas prices," said the statement.

Given that China accounted for one third of the world's crude steel output, if there was a global demand for the low-end product when no other country could meet the demand, market forces would boost China's exports, it said.

The chamber maintained the competitiveness of domestic iron and steel companies came from relatively low production and management costs rather than government subsidies.

As the prices for iron ore and shipping charges keep rising, the export prices for China's steel products were also constantly climbing and in some cases even more expensive than exports from other countries.

Customs figures show the average price for China's steel exports to the European Union rose by 27.3 percent from January to September over the same period last year and are still rising. September alone saw a rise of 3.7 percent from August.

"Take a closer look at China's steel exports to the European Union, one would find that most of the products were generic or low-end products indigenous EU manufacturers wouldn't manufacture. China's exports were actually complementary to the EU market and accorded with the interests of some EU customers," said the statement.

The chamber said it was not proper for the Eurofer to file such anti-dumping applications while dialogue with the Chinese steel industry was under way.

The Ministry of Commerce also voiced regrets over the anti-dumping applications on Monday and hoped to solve the issue through dialogue and negotiation. It hoped the European Commission would refrain from adopting anti-dumping measures.

A statement released by the China Iron and Steel Association on Tuesday said it would organize domestic enterprises when necessary to answer the appeal and use legal means to defend the legitimate interests of local industries.

The Brussels-based Eurofer requested late October the imposition of anti-dumping measures on imports from China, including stainless steel cold-rolled flat products and hot-dipped metallic coated sheet and strip steel from China.

Eurofer claimed massive volumes have been dumped on the EU market at dumping margins of up to 40 percent, bringing down EU domestic prices by up to 25 percent and making life for European steel producer harder.

(Xinhua News Agency November 8, 2007)