Hyundai Steel and Dongkuk Steel have requested the government to extend anti-dumping duties on Chinese H-beam steel. 

This move comes amid concerns that if China resumes its export dumping practices as in the past, it could severely exacerbate the domestic market downturn, especially given the current influx of Japanese and Vietnamese H-beam steel amidst a slump in the domestic construction industry. However, some argue that the extension’s approval is uncertain, as it has already been extended once and trade barriers against Chinese steel products have been raised to their limit.

According to industry sources on Oct. 1, Hyundai Steel and Dongkuk Steel filed an application with the Trade Commission of the Ministry of Trade, Industry and Energy on Sept. 26 to extend anti-dumping duties and price undertaking measures on Chinese H-beam steel. H-beam steel is a construction material used as foundation piles in various buildings, including apartments.

This measure aims to extend the duties that have been in effect since 2015, following the two companies’ anti-dumping petition against Chinese H-beam steel in 2014. At that time, the government acknowledged that Chinese steel companies were disrupting the domestic market through dumping exports of H-beam steel and imposed anti-dumping duties of 28.23% to 32.72%. Some companies were subject to a voluntary price increase commitment system.

This measure, after one extension in 2021, is set to continue until the end of March next year. Under current law, to extend anti-dumping duties, companies must request a review, which must be completed six months before the termination date.

Hyundai Steel and Dongkuk Steel’s request for a further extension of measures against Chinese H-beam steel is to prevent an influx of duty-free volumes into the domestic market after the end of March next year. In fact, in 2014, before the duties were imposed, China exported 737,000 tons of H-beam steel to Korea, which is close to 30% of last year’s domestic production of 2.47 million tons.

The industry argues that at least the import restrictions on Chinese H-beam steel should be extended, especially as Japanese and Vietnamese H-beam steel is flooding in while the domestic construction industry’s slump is becoming prolonged. Of the 365,000 tons of H-beam steel imported into Korea last year, Japanese and Vietnamese products accounted for 155,816 tons (42.64%) and 131,632 tons (36.02%), respectively.

The domestic H-beam steel market has already been damaged by the influx of imported products. With no signs of recovery in the construction industry and a continuous influx of low-priced imported products, the distribution price of H-beam steel has plummeted by 18% from 1.3 million won per ton three years ago to 1.07 million won in September this year. In response, domestic companies have artificially raised the price to 1.1 million won per ton, but a price rebound remains elusive. Domestic production of H-beam steel has decreased by 23% from 3.21 million tons in 2020 to 2.47 million tons last year, and is expected to remain at a similar level this year.

An industry official said, “Although domestic demand has significantly contracted, the proportion of H-beam steel inflow through POSCO’s overseas subsidiary in Vietnam is steadily increasing. If China joins in, the recovery of the domestic H-beam steel market cannot be guaranteed.”

The Trade Commission will decide on extending the measures after determining whether dumping and damage to the domestic industry are likely to continue or recur if the anti-dumping duties and price undertakings are terminated. However, some argue that the extension’s approval is uncertain as trade barriers against Chinese steel products have already been raised to their limit, and H-beam steel has already been extended once.

Recently, the government has imposed consecutive anti-dumping duties on Chinese thick plates and hot-rolled steel sheets. SeAH Besteel has completed an anti-dumping petition on Chinese special steel bars, and Dongkuk CM on Chinese color-coated steel sheets and galvanized steel sheets.

An industry official explained, “While imposing anti-dumping duties may be an appropriate measure when considering only the steel industry, there are concerns about potential retaliatory measures from China on rare earth elements if trade barriers against China are raised.”

Source: Business Korea