China Challenged on Steel Dumping, Lead
Churning out half of the Earth's steel under little oversight, Chinese manufacturers are flooding the globe with substandard, lead-heavy products that threaten both end projects and the market, a leading Saudi steel producer contends.
The alleged defects include coatings with 50 times the lead content allowed internationally, says Saudi Arabia's largest producer of coated steel.
Okaz, an Arabic-language daily newspaper based in Jeddah, quotes Unicoil chairman Raed Al-Ajaji as saying that China exported about 163,000 tonnes of steel to the Kingdom in the first 10 months of 2014—nearly 70 percent of domestic demand.
Steel production in Saudi Arabia, the largest Arab economy, is about 380,000 tonnes per year, with consumption about 255,000 tonnes, Al-Ajaji estimated.
Saudi Arabia isn't the only company concerned with Chinese steel. The Wall Street Journal reported March 15 that China produces as much steel as the rest of the world combined, causing enormous surpluses that are flooding markets around the world.
China's steel exports increased by 63 percent between January 2014 and January 2015, the Journal reported. Its 2014 production was a 59 percent increase over 2013 and "was the most steel ever exported by any country this century," the news outlet said.
Meanwhile, domestic steel consumption in China has been nearly flat. Exports to the United States have soared, depressing prices. In the United States and Europe, calls for higher steel tariffs are rising.
Unicoil (Universal Metal Coating Company Ltd.) was established in 1997 as the first company in the Middle East to manufacture pre-painted steel and aluminum coils, according to its website. Initially a joint venture of a Saudi and Australian firm, the company has been 100 percent Saudi owned since 2004.
Unicoil shows its products' coating layers. The company says Chinese competitors are flooding Saudi projects with substandard steel that is coated with highly leaded paint.
"The problem is not only in these large supplies, which amount to flooding and dumping, but also in the quality of these products," Al-Ajaji said, according to a report in the English-language Emirates 24/7.
"Our tests showed steel sheets imported from China violate international specifications,” he said.
Thickness, Zinc Lapses
Al-Ajaji says the Chinese steel sheets are labeled with a thickness of 0.32 mlm, but testing showed they were about 0.26 mlm, Okaz reported.
In addition, the zinc used for corrosion protection has 18-30 ml gm per meter, "while the accepted average international rate is around 90 ml gm," the news outlet said.
The largest problem, however, is the coating, Al-Ajaji said.
With five process lines and manufacturing facilities in two cities, Unicoil says its steel and aluminum coil products dominate the Middle East/North African market.
“The most shocking result in the tests was that the coating of most Chinese steel products supplied to the Saudi market contained very high levels of lead, which is internationally banned," he told the news outlet.
"The tests showed that the lead levels in some samples were as high as 50 times the level permitted internationally."
Overall, he said, "A large part of the steel sheets exported by that country to the Saudi market are bad and adulterated."