Posted on 01 Nov 2024
POSCO has announced its cooperation with the government in the investigation into Hyundai Steel's anti-dumping complaint against Chinese heavy plate, raising attention to potential government-level sanctions against China's aggressive export practices. Chinese steel companies have been selling their surplus products at low prices, leading to a challenging period for the South Korean steel industry in recent years.
The Trade Commission of the Ministry of Trade, Industry and Energy has accepted Hyundai Steel's request and has initiated an anti-dumping investigation against Chinese heavy plate manufacturers. Heavy plates, primarily used in shipbuilding, construction materials, and machinery, have been at the center of the dispute. The Trade Commission is expected to decide on whether to impose tariffs on Chinese heavy plates after preliminary and main investigations.
During a conference call held on Oct. 30, POSCO Holdings stated, “We are extensively reviewing the necessity or possibility of filing anti-dumping complaints to counter unfair trade practices,” and added, “We acknowledge the severe damage to the domestic steel industry caused by the influx of imports based on unfair trade practices.” This marks a significant shift for POSCO, which has previously refrained from commenting on Chinese steel due to its relationships with customers and partners.
The steel industry is likely to pursue additional anti-dumping complaints against other steel products following the heavy plates. Hyundai Steel announced during the conference call that it is also considering filing additional anti-dumping tariff complaints against other imported steel products such as hot-rolled steel sheets and shaped steel. POSCO echoed this sentiment, stating, “We are reviewing various measures to protect the South Korean steel industry.”
The outlook for the South Korean steel industry is not bright. Although the Chinese government has announced economic stimulus measures and is investing in the recovery of its domestic construction market, it is expected to take time for the effects to materialize. Additionally, the United States' protectionist stance is likely to strengthen, and regulations on South Korean steel products may be tightened after the presidential election.
Steelmakers' performance continues to decline. In the third quarter, POSCO's sales and operating profit were 9.48 trillion won (approximately $6.86 billion) and 440 billion won, respectively, down 2.15% and 39.7% year-on-year. Hyundai Steel recorded sales of 5.6243 trillion won and an operating profit of 51.5 billion won in the third quarter, down 10.5% and 77.5% year-on-year, respectively.
The South Korean steel industry, one of the world's leading steel producers, is crucial to the country's economy, providing materials for construction, shipbuilding, automotive manufacturing, and other sectors. However, the influx of cheap Chinese steel has caused significant disruptions. China, the world's largest steel producer and exporter, has been accused of flooding international markets with cheap steel, leading to accusations of dumping.
Source:Businesskorea
