Steel Strike: Chinese metallurgists suffer from low-cost auto race
The Main Metallurgical Association of China has warned that the price war in the electric vehicle market is causing serious damage to steel mills and worsening their financial situation.
This is reported by the Bloomberg news agency.
According to the Chinese Iron and Steel Association in a statement, some automakers have been demanding that metallurgists reduce prices for steel sheets for cars by more than 10% since last year. It is also noted that some companies delay payment for several months.
The electric car market in China is currently undergoing a fierce price war, which has caused a collapse in company shares and forced the government to intervene to stabilize the situation.
For Chinese steelmakers, this is another blow — in addition to the ongoing crisis in the real estate sector and the economic slowdown caused by the trade wars initiated by the United States.
"Car companies are aggressively fighting for prices, putting serious pressure on suppliers of raw materials," the association said in a statement."This seriously undermines the stable operation of metallurgical enterprises."
An association that includes the country's largest steel mills, including Baoshan Iron & Steel Co., called for cooperation with the automotive industry to ensure a fairer market.
Chinese electric car manufacturer BYD has sharply lowered the prices of its cars in China, intensifying competition with Tesla in China.
Shares of Chinese automakers plummeted after BYD lowered prices for its cars.
BYD's shares fell by more than 10% in two days after a massive price cut last week, raising fears of a new wave of price war in China's fiercely competitive electric vehicle market.