Thu, Nov 05, 2015 - Page 15 News List

Chinese steel faces punitive tariffs after US investigation

Bloomberg

Imports of some anti-corrosive steel from China might be taxed as much as 236 percent based on the level of subsidies they receive, according to a preliminary finding by the US Department of Commerce.

The department found five Chinese exporters, including Angang Group Hong Kong Co (鞍鋼集團香港) and Baoshan Iron & Steel Co (Baosteel, 寶鋼), received subsidies of that amount, it said in an e-mailed statement.

US Customs and Border Protection are to be instructed to require cash deposits based on the subsidy rates, the department said.

Shipments from Taiwan had minimal support, exports from South Korea received as much as 1.4 percent subsidies, while companies from India were subsidized as much as 7.7 percent and Italy supported exports by as much as 38.4 percent, according to the report’s preliminary findings.

The preliminary finding is the first decision in three sets of trade cases that US steel producers have filed this year, as a glut of output from foreign producers led by China has pushed down prices to nine-year lows and seen US mills idle 31 percent of capacity. If validated, the decision might end some imports and help lift domestic prices.

The decision is set to curb Chinese exports to North America, China Iron & Steel Association (中國鋼鐵協會) deputy secretary-general Wang Yingsheng (王穎生) said from Beijing, while estimating the US makes up only about 3 percent of China’s overseas sales.

Shipments are facing increasing trade friction globally and probably would not exceed 100 million tonnes this year, he said by telephone.

Sales surged 27 percent to 83 million tonnes in the first nine months.

The five Chinese companies that were found to have to received subsidies of 236 percent did not participate in the probe. Another company, Yieh Phui (China) Technomaterial Co (燁輝中國科技材料), received a subsidy rate of 26.3 percent, the Department of Commerce found.

On June 3, six US steel producers, including Nucor Corp and US Steel Corp, filed cases against anti-corrosive steel from Taiwan, China, South Korea, India and Italy. Imports of anti-corrosive steel from the five target countries surged by 84 percent last year, while imports of all steel products jumped by 38 percent to 40.2 million tonnes, according to the US Census Bureau.

Nucor chief executive officer John Ferriola said the company believes the duty would have an impact on Chinese steel shipments and was a good sign for cases still outstanding.

Anti-corrosive steel is a form of the metal that has been galvanized, coated with zinc, aluminum or other treatments to keep it from rusting.

On Oct. 30, the Department of Commerce found that at the beginning of the investigation, imports jumped from four of the five countries, Taiwan, China, South Korea and Italy. Such a finding of so-called critical circumstances allows the department to enact retroactive duties on those shipments. Commerce is scheduled to issue estimates of anti-dumping duties in the case on Dec. 21.

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