According to Mintec, the European steel price for cold rolled coil fell from $727 per tonne (£461) in January to $625 (£396) in October.
Loraine Hudson, market analyst at Mintec, said: “The Chinese steel market is having a significant impact on the world market, as it is by far the largest producer and consumer of steel. The Chinese market has witnessed overcapacity in the steel sector, resulting in steel prices dropping domestically. Despite weak demand growth, production has been increasing throughout most of this year.
Despite the slowdown in its domestic market, China is continuing to produce record quantities of steel and this year official figures suggest that output could exceed 80m tonnes. In addition, Chinese producers, which already are among the cheapest in the world due to cheap labor and energy, costs are benefiting from a deep slump in the cost of iron ore and nickel falling into a bear market.
European smelters are already beginning to suffer from a flood of cheap Chinese steel. According to Macquarie, Chinese stainless steel exports to Europe have surged by 115.4pc to 522,000 tonnes in the first three quarters of the year. The broker also notes that China’s share of the market for cold-rolled stainless steel sheet metal, a material used widely in the European car industry, has climbed to 35pc in the past few months, up from just 10pc last year.