Japan to curb steel sales to China

China is the No. 2 market for Japanese steel, with demand rising as more production moves there

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TOKYO, Japan -- Japan's top steel producers plan to slash their exports to China, to appease the Chinese government.

The voluntary curbs come after China imposed emergency curbs on steel imports in July. The move will cut supply and boost prices.

"Our understanding is that every major company will cut exports to China by 30 to 40 percent, depending on products, in the current quarter," a spokesman at Nisshin Steel Co. said, according to Reuters news agency.

China's temporary measures expire in November and the government hasn't decided whether to install a permanent cap.

But the six major steelmakers in Japan hope this voluntary step will suffice. The companies had already said they would cut steel exports in the fourth quarter but hadn't given specifics.

Nippon Steel will slash its sales to China by 30 percent, according to one report, with Nisshin Steel, Kobe Steel, Kawasaki Steel, NKK and Sumitomo Metal Industries imposing their own curbs.

No. 2 market for Japanese steel

Japan's trade ministry figures the overall reduction in exports is a 40 percent drop over the first half of the year or 10 percent over the second half of 2001.

China takes around 20 percent of Japan's steel exports, making it the second-largest recipient after South Korea.

Sales have rocketed this year, growing more than 50 percent since China joined the World Trade Organization at the end of 2001, a pace that had been picking up as the year wore on.

Japanese steel is in demand as companies ramp up production of cars, electronics and other products.

China's curbs came as a reaction to safeguard tariffs imposed by the United States on steel imports.

But after global opposition to the move, the United States exempted hundreds of products from the country's most affected by the higher fees.

China said it was little affected by the U.S. move because it uses most of the steel it produces domestically.

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