[Exclusive] Steel Industry Initiates Anti-Dumping Petition on Chinese Thick Plates

Increase in Low-Cost Imports Causes Domestic Market Confusion

The domestic steel industry has decided to file an anti-dumping complaint against Chinese hot-rolled steel plates and has begun preparations. The steel industry, suffering from an increase in low-priced Chinese imports, is now taking full-scale action. However, they are showing a cautious stance regarding anti-dumping complaints on commonly used hot-rolled steel.

Hot plate production at Hyundai Steel Dangjin Steelworks (Provided by Hyundai Steel)

According to the industry on the 14th, Hyundai Steel has decided to file a complaint and has started assessing the damage caused by imports of Chinese hot-rolled steel plates. A Hyundai Steel official said, "Recently, China has been flooding the market with surplus quantities at low prices due to weak demand, distorting market prices and causing severe damage," adding, "We are investigating specific cases of damage to prepare for the anti-dumping complaint."

It has also been confirmed that POSCO strongly agrees on the necessity of filing an anti-dumping complaint against Chinese hot-rolled steel plates.

If the two companies, which dominate the domestic hot-rolled steel plate market, apply to the government for a dumping investigation, it is expected that the investigation will proceed without difficulty. Under current law, a dumping investigation can be requested if a business operator accounting for 25% or more of domestic production of the product or domestic producers who express approval (excluding non-responses) have more than 50% approval for the anti-dumping investigation.

When applying for a dumping investigation, it must be proven that imports of the product have increased both absolutely (import volume) and relatively (domestic market share), causing damage to the domestic industry, and that dumping occurred at a rate of 2% or more.

Hot-rolled steel plates are thick hot-rolled steel sheets with a thickness of 6mm or more, mainly used for ships, construction materials, and machinery. Domestic production of hot-rolled steel plates was 2.147 million tons in the first quarter, slightly down from 2.158 million tons last year.

The reason domestic companies have decided to file an anti-dumping complaint against Chinese hot-rolled steel plates is that they have been flooding into the domestic market over the past one or two years. Chinese products have overtaken Japanese products to become the top import source. According to the Korea Iron & Steel Association, imports of hot-rolled steel plates from January to April this year reached 710,000 tons. Among these, Chinese imports accounted for 436,000 tons, more than 60% of the total. Despite a favorable weak yen situation for imports, Japanese hot-rolled steel plate imports were only 268,000 tons.

The significant increase in Chinese hot-rolled steel plate imports began last year. In 2022, Chinese imports accounted for 647,000 tons (38.2%) out of a total import volume of 1.692 million tons. Meanwhile, Japanese imports were 1.021 million tons, ranking first. However, last year, total imports rose to 1.99 million tons, with Chinese imports surging to 1.12 million tons (56.2%), driving the increase. Japanese imports decreased to 864,000 tons (43.4%).

The domestic distribution price for hot-rolled steel plates is about 1 million KRW per ton, but the imported volume from China is known to be in the high 800,000 KRW range, showing nearly a 10% difference. A steel industry official said, "If prices are undercut below cost, domestic demand will inevitably be drawn in," adding, "This is seriously distorting domestic prices."

The anti-dumping complaint is expected to be limited to hot-rolled steel plates used for construction and machinery. Unlike hot-rolled steel sheets, there is less opposition from major domestic industries regarding complaints on construction and machinery hot-rolled steel plates, which is a positive factor. The main users of hot-rolled steel plates are shipyards, which mostly operate in bonded areas for export purposes and are exempt from tariffs, so even if anti-dumping duties are imposed, the impact is minimal.

Meanwhile, the anti-dumping complaint against Chinese hot-rolled steel sheets, which has been under review since early this year, does not seem easy. The steel industry considered filing an anti-dumping complaint against Chinese hot-rolled steel sheets earlier this year, but it was shelved due to opposition from steelmakers.