* Chinese exporters eyeing more business in Africa, South
America

* Shipments to top market Southeast Asia drop by double
digits

* China’s export world shrinking as U.S. targets Chinese
steel

* China’s steel production & exports: https://tmsnrt.rs/2st3wYH

By Manolo Serapio Jr and Muyu Xu

MANILA/BEIJING, June 6 (Reuters) – Chinese steelmakers are
seeking new export destinations in Africa and South America as
shipments to their biggest overseas buyers in Southeast Asia
fall by double digits, with new U.S. trade actions threatening
to kill off some markets entirely.

China, the world’s largest maker, consumer and exporter of
steel, is finding it has fewer export options. Washington last
week imposed hefty tariffs on major steel exporters to the
United States – Canada, Mexico and the European Union –
prompting retaliatory measures.

The global tariffs Washington kicked off in March were
mainly aimed at curbing Chinese steel imports, which U.S.
steelmakers also believe are being routed through other
countries before landing in the United States.

Last month, the U.S. Commerce Department slapped heavy
import duties on steel products from Vietnam it says originated
in China, hitting China’s No. 2 export market after South Korea,
and a major outlet for sales by Chinese mills that own
warehouses in Vietnam.

Vietnam said its steel companies would likely stop buying
the metal from China to avoid having their shipments to the
United States penalized.

“It is increasingly apparent that export opportunities for
Chinese producers are becoming increasingly limited, owing to
existing trade legislation, lodged by many parts of the world,”
said Chris Jackson, analyst at UK-based steel consultancy MEPS
International Ltd.

While China’s steel exports hit an eight-month high in
April, shipments for the first four months of the year dropped
by 20 percent, although falling only 2.5 percent in value.

Shipments to China’s top markets, including Vietnam and
South Korea, have dropped by double digits since last year,
reflecting stiffer competition from other suppliers like Russia.

Anti-dumping duties imposed by Southeast Asian buyers like
Thailand, Vietnam, Indonesia and Malaysia on Chinese steel
exports have also slowed shipments from Beijing.

‘CROWDED’ OUT

“The Southeast Asian market is getting crowded. More and
more people are seeking to find new markets, especially in South
American and African countries,” said Steven Yue, sales manager
at Hebei Huayang Pipeline Co, a Chinese exporter of steel pipes.

“We plan to work harder to develop the South American and
African market from the second half of this year.”

South America and Africa accounted for a combined 8 percent
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 were down 45
percent from the year before, and slipped by a third in the
first quarter of 2018, according to data tracked by MEPS.

Exports to Nigeria, Africa’s biggest economy and the
continent’s top buyer of Chinese steel, rose 15 percent in the
first quarter, and shipments to Algeria, the fourth-largest
economy, nearly tripled. In South America, Chinese shipments to
Brazil jumped 40 percent and climbed almost tenfold to Bolivia.

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, based on World Trade Organization data.

As Chinese exporters venture deeper into the new markets,
they could clash with home-grown suppliers, such as in Brazil,
or with sellers from Russia and elsewhere.

But Hebei Huayang’s Yue believes most Chinese steel products
are competitive in Africa and South America “because of a lack
of domestic production capacity there.”

BIGGER POTENTIAL

China’s steel exports have fallen from a record 112.4
million tonnes in 2015 to 75.4 million tonnes last year, as a
Beijing-led infrastructure drive boosted domestic demand.

Still, the China Iron and Steel Association said the impact
of the U.S.-China trade dispute on Chinese steel exports “should
not be underestimated.”

“If steel exports went down again this year, then steel
products would flow to the domestic market and that would worsen
the situation of our own market,” CISA said last month.

China’s direct steel exports to the United States account
for less than 1 percent of total shipments, but Washington is
making Chinese-produced steel more costly in America via steep
import duties on steel from Vietnam that originated in China.

To avoid the U.S. anti-dumping duties, most Vietnamese steel
companies – which mainly buy hot-rolled coil steel (HRC) from
China – will likely stop importing HRC from Beijing, said Chu
Duc Khai, vice chairman of the Vietnam Steel Association.

Vietnam exported 4.7 million tonnes of steel last year, with
nearly 60 percent going to Southeast Asia and around 11 percent
shipped to the United States.

Taiwanese conglomerate Formosa Plastics Group’s new steel
plant in Vietnam also began producing HRC in June last year,
said Khai, cutting Hanoi’s need to buy from China.

The growing steel capacity in Southeast Asia, including
Vietnam, Indonesia and Malaysia, will eventually pare demand for
imports, said CRU analyst Alex Zhirui Ji.

“Many friends of mine have turned to do business with
African countries since they have bigger potential with bigger
demand,” said a steel trader and exporter based in China’s top
steelmaking city of Tangshan.

“I feel business in Asia is getting difficult, so I am also
searching for a new market. Probably I will join my friends in
going to Africa.”

(Reporting by Manolo Serapio Jr. in MANILA and Muyu Xu in
BEIJING; Additional reporting by Khanh Vu in HANOI and Jane
Chung in SEOUL; Editing by Tom Hogue)