But now China’s economy is slowing down. The latest five-year plan focused on moving the economy from a focus on industrial production to consumption. 

They want more focus on improving living standards and dealing with their environmental problems. And importantly, the growth target dropped from 7.5% to 6.5%. (In a US$10 trillion economy, that 1% difference equals US$100 billion – that’s a lot of money for anyone.)

With less focus on rapid growth (even though 6.5% is still pretty high) there is less incentive to invest in construction. This has driven down the demand for steel, with the result being global steel prices slumping to a 10-year low.

The World Steel Association said China’s demand for steel dropped 3.5% in 2015, and will fall again in 2016. 

This has forced Chinese steelmakers to look outside the country for customers to buy all their extra steel. As a result, in 2015 China steel exports increased 25% to 112 million tons. 

That’s more than any other country’s (except Japan’s) total production. Their production costs are also subsidized by the Chinese government, so they are covered even if they produce steel at a loss.