Following complaints about the flooding of the domestic market with stainless steel that was damaging the local industry, an investigation into dumping allegations of the metal has bene launched in China. the estimated dumping of stainless steel through imports is worth $1.3 billion. The investigations will encompass a number of firms that include a privately owned Chinese mill that has off shore business as well.
The scope of the investigations would include importing from sources like the European Union, Japan, South Korea and Indonesia of stainless steel billet and hot-rolled stainless steel sheet and plate, the Commerce Ministry said on Monday. Such imports had almost tripled in 2017.
The ministry said that the investigation was initiated following complaints primarily by Shanxi Taigang Stainless Steel which was also supported by four other state-owned mills that includes Baosteel’s stainless steel division. The steel makers blamed cheap imports of the metal for the fall in domestic prices.
Almost half of the world’s stainless steel is made and consumed by China. the metal is put to use in buildings for protection against corrosion in and in transportation and packaging.
A number of Chinese companies have bene listed in the complaint along with eight foreign producers. The complaint targets the Indonesian unit of Tsingshan Stainless Steel – one of the largest stainless steel producers and 19 traders in China who are engaged in importing the product.
Driven by the wide availability of nickel resources and lower-cost of production, in recent years a number of privately owned Chinese firms have opened or started building factories for the metal in Indonesia.
Analysts say that a large portion of the new production has been sold in China.
The complaint filed by Shanxi Taigang – which was also released by along with the commerce ministry document, alleges that the Chinese market for stainless steel has been damaged because of a very fast increase in imports.
In 2017, imports from Indonesia accounted for accounted for almost two-thirds of China’s stainless imports. The complaint said that the imports were just 5 per cent of the total domestic consumption in 20916 and zero in 2015. In 2017, that number was as high as 86 percent in the first quarter.
“If we allow these products to continue to enter the Chinese market with low prices and take more market share, sales of China’s domestic products will continue to decrease,” the complaint said.
The investigation was “totally driven by an industrial dispute between SOEs (state-owned enterprises) and the fast-growing private mills”, said Peter Peng, senior consultant at CRU in Beijing.
“Due to their cheap production costs, it’s more competitive than Chinese products,” he said.
Peng said that companies importing stainless steel into China would have to find new markets because of anti-dumping duties if imposed.
Spain’s Acerinox, Finland’s Outokumpu Oyj and Luxembourg-based Aperam are among the European companies included in the probe.
(Adapted form Reuters.com)