There’s growing concern that the supply of low-cost steel from China will intensify. As global trade barriers against Chinese steel rise, analysts predict that China will increase its exports to Southeast Asia, including South Korea. The steel industry is accelerating its response measures, such as filing anti-dumping lawsuits.
On the 20th, industry insiders reported that China continues to push its steel products at low prices. As the Chinese economy is yet to recover, it is pushing oversupply abroad.
As a result, imports of Chinese steel materials, which are cheaper than domestic ones, are increasing. For instance, Chinese hot-rolled steel is known to be around $145 per ton cheaper than domestic steel. Considering that domestic steel costs around $650 per ton, Chinese steel is roughly 22% cheaper.
According to the Korea Iron and Steel Association, the volume of Chinese steel imports reached 8.73 million tons last year, a 29% increase from the previous year. The volume of imports in the first quarter of this year also amounted to 2.28 million tons, accounting for 57% of the total import volume.
Some are concerned about the backlash against major countries around the world raising trade barriers against low-cost Chinese steel. The U.S. has increased its tariff on Chinese steel from 7.5% to 25%, more than tripling it. Brazil has also started an anti-dumping investigation into Chinese carbon steel plates. Vietnam and the UK, alongside Brazil, are looking into the issue of Chinese steel dumping.
If global countries impose anti-dumping tariffs on Chinese steel, there is a possibility that these exports will enter South Korea and Southeast Asia.
The domestic steel industry agrees on the need to prepare a response to the threat of low-cost Chinese steel and other unfair steel products.
Seven steel companies, including POSCO, Hyundai Steel, Dongkuk Steel, and the Korea Iron and Steel Association recently held a Steel Export and Import Issue Review Meeting with the Ministry of Trade, Industry, and Energy. At this meeting, they shared field opinions and discussed ways to maintain competitiveness against the onslaught of Chinese steel.
Hyundai Steel has launched market research to file an anti-dumping lawsuit against Chinese hot-rolled and cold-rolled products. It is also reported that the government has begun a re-examination to extend the expiration date of the anti-dumping tariffs on flat-rolled stainless steel from China and other countries.
An industry insider said, “If the U.S. and other countries impose anti-dumping tariffs on Chinese steel, there is a possibility that these volumes will enter the South Korean market. It is important to subdivide steel products by item and prepare countermeasures accordingly.”
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