Dive Brief:

• Steel prices hit a record low of 1,733 Chinese yuan (about $272) on Wednesday, down more than a third year-to-date. In the first 10 months of the year, the country’s steel consumption fell by 5.7%, to 591 tons, according to the China Iron and Steel Association.
• China's Tangshan Songting Iron & Steel, the largest manufacturer of this commodity in China, has halted production due to smoldering market demand.
• The market assault in China, the largest steel producer in the world, is due to overcapacity of 400 million tons, reported CNBC. This has affected markets worldwide, including in the U.S. where imports are up, but exports are down.

Dive Insight:

Due to the issue of overcapacity, Chinese steelmakers are exporting high volumes of their manufactured material at low prices, impacting scrap metal markets worldwide. Specifically in the US, annual steel imports doubled from about 20% to almost 40% in the last few years.

With this trend comes a drop in U.S. exports. In Taiwan, traditionally the second biggest export for U.S. ferrous scrap, U.S. purchases fell 32% year-over-year to 14% in the first five months of 2015.

The strong U.S. dollar has not helped either, though business analysts predict that the market may rebound by as much as 8.5% in 2016 if the dollar’s value declines.