According to the market reports, Zimbabwe and China have recently signed a 1-billion-U.S.-dollar Memorandum of understanding (MoU) to build a steel plant (in Zimbabwe) that can produce up to 2 MnT of steel per annum.
China’s unlisted Tsingshan Holding Group has outlined the agreement to build the steelmaking plant after completing a feasibility study and the project is being spearheaded by Tsingshan’s subsidiary in Zimbabwe, Afrochine, which is already into ferrochrome production. China’s Tsingshan Group is one of the top five producers of stainless steel in the world. The project is expected to create employment for about 3,000 people in the city.
Zimbabwe’s only integrated steel plant, ZISCO was shut down in 2008 amid economic crisis in the country and in 2017 Chinese firm R&F had announced its plan to invest up to USD 2 billion to revive the operation of ZISCO.
Some African countries have been actively building industrial parks and special economic zones to create new drives for economic and social development and China is supporting the same via investments, technology and raw material supply.
China’s investment in Africa has totaled over 100 billion dollars and the country has built more than 20 economic zones in the continent, with more planned in the coming years.
However, these efforts by Chinese companies especially the steelmakers are seen as their attempts to explore the new export destinations in Africa and also South America as shipments to their biggest overseas buyers in Southeast Asia have fallen by double digits and U.S.’s new trade actions are threatening to kill off some markets entirely.
Africa and South America accounted for a combined 8% of China’s steel exports last year, and shipments to some nations there have surged this year. Southeast Asia accounted for a quarter of China’s exports last year, but was down 45% from the year before, and slipped by a third in the first quarter (Jan to Mar) of 2018, according to country’s customs data.
Exports to Nigeria, Africa’s biggest economy and the continent’s top buyer of Chinese steel, rose 15% in the first quarter, and shipments to Algeria, the fourth-largest economy, nearly tripled.
As per the WTO data, compared to Asia, there are fewer nations in Africa and South America with anti-dumping duties and safeguard measures against Chinese steel products, including Brazil, Colombia, Chile and South Africa.
ArcelorMittal South Africa, which supplies nearly all of its steel output to African markets has recently commented that the increased competition in global steel markets has been driven primarily by capacity expansion in China and the bigger threat for South African industry right now is the import of finished goods, made predominantly of steel, into the African markets.
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