China's steel export licenses are set to curb trade frictions

China's export licence requirement for some 300 steel products will allow closer monitoring of steel exports and is aligned to World Trade Organization rules, the country's commerce ministry said on Thursday.

The world's largest steel producer and consumer last Friday said it planned to implement a licence system from 2026 to regulate exports of the metal, as its shipments have faced a growing protectionist backlash worldwide.

"The steel export licence system complies with the World Trade Organization rules," He Yadong, the spokesman at the commerce ministry told reporters at a regular weekly briefing on Thursday, adding it did not involve restricting export volumes.

China's steel exports have ballooned since 2023, following the recovery from the impact of the COVID-19 pandemic, despite trade barriers being enforced by a growing number of countries on the grounds that the cheap products damage domestic manufacturers.

"There is a problem with the current steel exports: volumes increased but value shrank, which has triggered massive trade frictions," Luo Tiejun, vice chairman at the state-backed China Iron and Steel Association, was cited as saying in a statement of the association on Thursday.

In the first 11 months of this year, outbound steel shipments jumped by 6.7% year-on-year to a record high for the period at 107.72 million metric tons, while the corresponding dollar value fell by 2.1%, customs data showed.

VALID FOR SIX MONTHS WITHIN A CALENDAR YEAR

The steel export licence, which requires an online application, will be valid for half a year and can only be used during the year in which it is issued even if the six-month period has not expired, the CISA statement said, citing an official from the commerce ministry.

The export licence can be used up to 12 times to clear customs for some specified trades during its period of validity, the statement said.

China has previously applied a licence system to its steel exports. In 2007, it mandated export licences for some steel products, but cancelled the requirement in 2009.