BUSINESS China probes $1.3b of stainless steel imports


China probes $1.3b of stainless steel imports

People's Daily app

00:06, July 24, 2018

Mills in Indonesia, EU, Japan and South Korea targeted after complaint

China on Monday launched an anti-dumping probe into stainless steel imports worth $1.3 billion, including from a privately-owned Chinese mill with operations offshore, after complaints that a flood of products has damaged the local industry.

The Chinese Ministry of Commerce (MOFCOM) said on Monday that the investigation will target imports of stainless steel billet and hot-rolled stainless steel sheet and plate from the EU, Japan, South Korea and Indonesia - imports that nearly tripled in 2017.

The move follows a complaint by Shanxi Taigang Stainless Steel, where it blamed cheap imports on falling prices. The complaint was backed by four other State-owned mills including Baosteel's stainless steel division. 

China makes and consumes around half of the world's stainless steel, which is used to protect against corrosion in buildings, transportation and packaging.

While the complaint targets eight foreign producers, it also lists a number of Chinese companies, including the Indonesian unit of one of the world's top producers, Tsingshan Stainless Steel, as well as 19 traders who import such products.

Some private Chinese companies have opened or started building plants in Indonesia in recent years, drawing on its plentiful nickel resources and lower production costs.

A significant portion of new production has been sold in China, analysts say.

The rapid increase in imports damaged the Chinese market, according to the complaint filed by Shanxi Taigang that was released along with the MOFCOM statement.

Almost two-thirds of China's stainless imports came from Indonesia in 2017, up from 5 percent in 2016 and zero in 2015, the complaint said. That rose to as high as 86 percent in the first quarter of this year, it said.

Imported prices of stainless steel products fell 23 percent to $1,867 a ton in 2017 from $2,436 a year earlier.

"If we allow these products to continue entering the Chinese market with low prices and taking more market share, sales of domestic products will continue to decrease," the complaint said.

Peter Peng, senior consultant at CRU in Beijing, said the investigation was "driven by an industrial dispute between State-owned enterprises and fast-growing private mills."

"Due to their cheap production costs, they're more competitive than Chinese products," he said.

Tsingshan opened a mill in Indonesia last year with an annual capacity of 3 million tons, while Delong Holdings plans to start production there next year.

Anti-dumping duties would force mills to find new markets for their products, adding to a global glut, Peng said.

(Sources: Reuters-Global Times)

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