Record High Imports of Chinese Thick Steel Plates... Will the Government Impose Anti-Dumping Tariffs?

Record-High Imports at 1.37 Million Tons Last Year
"Price Gap Up to 30%... Crisis for Industry Competitiveness"

Imports of Chinese hot-rolled steel plates reached a record high last year, drawing attention to whether the government will impose anti-dumping duties. The steel industry is hoping for high tariffs to overcome the price gap with Chinese products.

According to the government and the steel industry on the 13th, the Trade Commission of the Ministry of Trade, Industry and Energy will hold a meeting on the 20th to coordinate opinions regarding the anti-dumping measures on Chinese hot-rolled steel plates filed by Hyundai Steel. If the Trade Commission issues a preliminary ruling recognizing the damage to the domestic steel industry caused by the influx of Chinese hot-rolled steel plates after this meeting, it will proceed to impose provisional anti-dumping duties on Chinese hot-rolled steel plates. The government also imposed provisional anti-dumping duties (21.62%) on Chinese stainless steel hot-rolled plates last month, so the industry is highly anticipating a preliminary ruling.

(Note: Excluding stainless steel plates)

Steel Industry Hit Harder... Demand Declines but Chinese Imports Hit Record High

Hyundai Steel, the second-largest steelmaker in Korea, filed an anti-dumping complaint with the Ministry of Trade, Industry and Energy’s Trade Commission in July last year regarding Chinese hot-rolled steel plates, and the Trade Commission initiated an anti-dumping investigation in October of the same year. Anti-dumping duties are measures to protect domestic industries by imposing additional tariffs on imported goods sold at prices lower than the exporting company's domestic sales price, known as 'dumping.'

This meeting is particularly noteworthy as it coincides with U.S. President Donald Trump including Korea in the 25% tariffs on steel and aluminum. The industry is concerned about the impact starting from the implementation date of the U.S. tariffs on the 12th of next month.

The biggest issue is the onslaught of Chinese products. While domestic steel demand sharply declined last year, imports of Chinese hot-rolled steel plates reached an all-time high. According to the Korea Iron & Steel Association, domestic demand for hot-rolled steel plates increased from 8.11 million tons in 2021 to 8.21 million tons in 2022 and 8.39 million tons in 2023, but dropped to 7.8 million tons last year. In contrast, imports of Chinese hot-rolled steel plates rose from 440,000 tons in 2021 to 790,000 tons in 2022, and further increased by 64.5% to 1.3 million tons in 2023, reaching a record high of 1.37 million tons last year (excluding stainless steel hot-rolled plates).

Considering the price of hot-rolled steel plates at around 1 million KRW per ton, the domestic hot-rolled steel plate market size reaches approximately 8 trillion KRW annually. If the Trade Commission issues a preliminary anti-dumping ruling on Chinese hot-rolled steel plates, the largest market among all decisions made by the Trade Commission will be affected.

Industry: "Expecting a Positive Decision... Tariff Rate Is Crucial"

The industry is hopeful that the Trade Commission will decide to impose tariffs, considering the precedent of provisional anti-dumping duties on stainless steel hot-rolled plates and the current situation faced by the industry. In particular, they insist that the tariff rate should reflect the price gap of over 20% between Chinese and domestic hot-rolled steel plates.

An industry official said, "Not only the decision to impose tariffs but also the tariff rate is very important," emphasizing, "In a situation where prices differ by 20% to 30%, imposing a 10% tariff would be meaningless." He added, "In terms of supply stability, domestic hot-rolled steel plates have an advantage over Chinese products," and explained, "The government needs to reduce price competition so that this advantage can be effective." He further stated, "The industry is already recording losses, so there is no room for further price cuts on domestic hot-rolled steel plates," and argued, "Ultimately, (imposing tariffs) should be approached from the perspective of normalizing a fair trade market."

However, some express concerns that this measure could affect the shipbuilding industry, which has recently experienced a 'super cycle.' An industry insider emphasized, "The complaint targets construction-grade hot-rolled steel plates, so there should be no impact in terms of tariffs." Another official said, "This is not an immediate issue but a problem that could damage the competitiveness of the domestic steel industry in the mid to long term," and added, "Careful yet swift judgment is necessary."