**Abstract**
Since the beginning of the 21st century, as the global steel industry has gradually shifted and expanded towards China, the country has become the world's largest steel exporter—this includes both direct and indirect exports. According to customs data, from January to October 2013, China exported 51.97 million tons of steel, marking a 13.6% increase compared to the previous year. Based on this trend, it is estimated that total steel exports for 2013 could reach around 62 million tons, with crude steel conversion exceeding 65 million tons, far surpassing the levels seen in prior years.
While direct steel exports have risen significantly, indirect exports driven by the export of machinery, vehicles, and household appliances have also grown rapidly. The International Steel Association reported that in 2011, China’s indirect crude steel exports—primarily measured through mechanical and electrical product exports—reached 71.4 million tons, which was 4.5 times higher than in 2002. According to General Administration of Customs statistics, in 2012, the export value of mechanical and electrical products increased by 8.7% year-on-year, and by the first ten months of 2013, this figure had climbed to 7.6%. These products accounted for 57.2% of China’s total exports. Based on these trends, it is expected that China’s indirect crude steel exports in 2013 will exceed 80 million tons. Adding direct and indirect exports together, total crude steel exports could approach 150 million tons.
Looking ahead, both direct and indirect steel exports are expected to remain at high levels in 2014. Even if there is a slight decline from 2013, crude steel conversion is still projected to exceed 100 million tons. In the following year, direct and indirect crude steel exports are likely to surpass 100 million tons, becoming the norm.
The 150 million tons of crude steel exports in 2013 were not the peak, and future growth is expected, potentially reaching as high as 200 million tons. Two main factors are driving this growth: first, the recovery of developed economies, particularly in Europe and the U.S., which has led to increased demand for steel products. As these economies grow, so does their need for steel, especially in construction and manufacturing. With most global steel production capacity concentrated in China, this growing demand is shifting toward Chinese steel exports. Despite challenges like anti-dumping measures and the appreciation of the yuan, China’s steel exports still grew by over 10% in 2013, signaling strong global demand.
Second, the expansion of high-speed rail systems worldwide is creating new opportunities for steel exports. Analysts predict that the next 10–20 years will be a golden era for global high-speed rail development. Countries such as the U.S., Russia, France, and Brazil are making significant investments in this area. According to China’s national high-speed rail plan, by 2020, the total length of high-speed railways worldwide is expected to exceed 50,000 kilometers, with more than 30,000 kilometers added in the next seven years. This will require an investment of over $1.1 trillion. China holds a competitive advantage in terms of cost and technology, with high-speed rail construction costs being only one-third to one-half of those abroad. Since high-speed rail is a highly steel-intensive industry—requiring over 3,000 tons of steel per kilometer—China’s exports in this sector are set to drive substantial indirect steel exports.
In addition to high-speed rail, future global infrastructure projects will further boost both direct and indirect steel exports from China. As China’s annual steel exports continue to exceed 100 million tons, they will play a critical role in meeting domestic and international steel demand. Current crude steel consumption of about 800 million tons is not yet the peak; future demand is expected to surpass 900 million tons, possibly approaching 1 billion tons.
Some departments often exclude exports when calculating apparent steel consumption, which can lead to an incomplete understanding of China’s overall steel demand. From a total balance perspective, this approach is unscientific. Steel demand is a whole, encompassing both domestic and international markets. Ignoring exports can create supply-demand imbalances, especially as crude steel exports surpass 100 million tons annually.
Steel production and its raw materials, such as coke and iron ore, are energy-intensive and polluting industries. Meeting a demand of 1 billion tons of crude steel, including 120–200 million tons of annual exports, would be unsustainable in China for the long term. Therefore, Chinese steel companies must expand overseas and transfer some of their production capacity. Large-scale imports of raw materials will eventually lead to increased imports of finished steel products, marking a strategic shift in China’s steel industry. This transition will help reduce the energy intensity of China’s GDP. Relevant authorities should implement top-level planning and forward-looking guidance, improve environmental standards, enforce stricter regulations, and raise environmental costs per ton of steel. Using environmental pressures as a driver will be essential in pushing steel companies to go global.
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