[Exclusive] POSCO to Pursue Extension of Anti-Dumping Measures on Chinese Stainless Steel

Tariff Imposition Period Ends in September
Decision to Submit Sunset Review Application
Attention on Whether Chinese Hot-Rolled Products Will Be Applied

POSCO has decided to extend the anti-dumping tariff period on Chinese stainless steel, which is set to expire this September. Since 2021, anti-dumping tariffs of up to 24.82% have been imposed on Chinese stainless steel, and with the three-year deadline approaching, the company has chosen to pursue an extension. There is also interest in whether this move will lead to the imposition of anti-dumping tariffs on Chinese hot-rolled products.

A POSCO official said on the 30th, "We will submit a sunset review application to continue imposing anti-dumping tariffs on Chinese stainless steel," adding, "This is a natural measure against low-priced Chinese imports that disrupt the domestic market."

To extend the anti-dumping tariffs, a review request must be submitted to the Ministry of Economy and Finance at least six months before the expiration. Accordingly, the Trade Commission is expected to start accepting review applications from late March to early April.

POSCO's decision to request an extension of the anti-dumping tariffs on Chinese stainless steel is based on the judgment that the low-priced supply offensive continues. The official stated, "In response to the oversupply triggered by China, companies with global steel production facilities are erecting trade barriers," adding, "If the world blocks imports but we keep our market open, the 'flood of Chinese stainless steel' will all come to us."

Since September 2021, the Korean government has imposed anti-dumping tariffs on stainless steel imports from China, Indonesia, Taiwan, and others. This was in response to POSCO's claim that "the domestic industry suffered damage such as market share decline and profit reduction due to low-priced imports." China, which accounts for 58% of global steel production, also imposes a 23.13% anti-dumping tariff on stainless steel imported from Korea.

Stainless steel cold-rolled coil products produced at POSCO Pohang Steelworks [Photo by POSCO]

There is also interest in whether POSCO's plan to extend anti-dumping tariffs on stainless steel will apply to Chinese hot-rolled products. A company official said, "We are reviewing the status of imported volumes and the impact on the domestic steel industry," adding, "We are considering all possibilities, including anti-dumping petitions and safeguard measures."

POSCO's position is that a vicious cycle is repeating as Japanese steel, which has gained price competitiveness due to the weak yen (Enjeo), and low-priced Chinese steel enter the domestic market without any regulatory measures. The volume of Chinese steel imports peaked at 11.53 million tons in 2017, then steadily declined before rising again to 8.73 million tons last year.

However, domestic steelmakers who purchase hot-rolled and stainless steel from POSCO are not welcoming this. Hot-rolled steel is produced by POSCO and Hyundai Steel, while POSCO is the sole domestic producer of stainless steel. Applying anti-dumping tariffs to products with a domestic monopoly market increases dependence on the monopolistic company and causes shortages and price hikes.

Three months after the anti-dumping tariffs on stainless steel were implemented in September 2021, POSCO raised domestic stainless steel prices by a total of 600,000 KRW. Considering that one coil weighs 18 to 20 tons, a simple calculation shows that POSCO earned an additional 12 million KRW in profit per coil sold during this period. In 2021, POSCO's stainless steel sales in the steel division reached 12.2434 trillion KRW, a 27.7% increase from the previous year, with domestic sales surging 50.4% to 3.5722 trillion KRW.

An industry insider said, "Due to the anti-dumping measures, the price difference with neighboring countries in the domestic market has widened to nearly 1 million KRW, breaking the linkage with international prices a long time ago." Another insider commented, "Applying anti-dumping tariffs on hot-rolled steel shifts the burden to material-using companies to increase the profits of monopolistic companies."

POSCO has stated its intention to pursue long-term win-win measures with small and medium-sized enterprises (SMEs) while extending the anti-dumping tariffs. A company official said, "We promised to stabilize domestic market supply and demand and operate prices at levels acceptable to the market, and we are fulfilling this commitment." POSCO supports SMEs by providing customized consulting and infrastructure and technology support for the commercialization of stainless steel products and technologies. It also continues to expand collaboration systems with SMEs by selecting small distribution companies as processing centers.