Korean steelmakers mull anti-dumping suit vs Chinese, Japanese firms

Under growing pressure from increased imports of cheap Chinese and Japanese steel products, South Korean steelmakers are considering filing an anti-dumping complaint with the Seoul government against their rivals in the two neighboring countries.

POSCO Holdings Inc., the parent of Korea’s top steelmaker POSCO, and Hyundai Steel Co. are reeling from heavy inflows of steel products from China and Japan, which are also struggling to cope with rising inventories amid weak demand at home.

According to the Korea Iron & Steel Association on Wednesday, Korea imported 8.73 million tons and 5.6 million tons of steel products respectively from China and Japan in 2023, up 29.2% and 3.1% from the year prior.

Korea’s import volumes from the two countries last year were the largest since 2017.

Of 15.54 million tons of steel products Korea imported from other countries in 2023, Chinese steel accounted for 56% while Japanese products made up 36%.

Data showed Chinese steelmakers exported a combined 90 million tons in 2023, the largest since 2016. Of the total, nine percent went to Korea.

CHINA’S PROPERTY CRISIS, WEAK JAPANESE YEN BOOST EXPORTS

Industry officials said Chinese steelmakers are ramping up their export volumes due to weak domestic demand amid the prolonged slump in their country’s property market.

Korean steelmakers also have to fend off a flood of high-quality but cheap steel products from Japan in the wake of the yen’s weakness.

Worse yet, the quality of low-priced Chinese steel products has also significantly improved, putting an extra burden on their Korean rivals.

“In the past, Chinese steel products were often regarded as being cheap and low quality, but not any longer. Japanese steel goods, most of which are high quality, have become cheaper due to the weak yen. Small Korean companies are opting for imports instead of Korean-made steel,” said an official at a Korean steelmaker.

With an increase in foreign steel products available in the Korean market, POSCO International Corp. recently faced a canceled hot-roll steel import contract, industry sources said.

Steel imports from China and Japan are mostly hot-rolled steel – the basic material for most other steel products including electrical steel sheets – and thick plates for shipbuilding.

Korea’s total thick plate imports last year reached 1.99 million tons, the highest since 2.16 million tons in 2016.

ANTI-DUMPING COMPLAINTS UNDER CONSIDERATION

Korean steel industry officials said Chinese and Japanese steelmakers are exporting their products to Korea at prices 5-10% lower than in their respective countries.

Japanese steelmakers such as Nippon Steel Corp., JFE Steel Corp. and Kobe Steel Ltd., in particular, shipped hot-rolled steel plates at prices 15% lower to Korea, industry sources said in September.

The price of Korean hot-rolled steel stood at 850,000 won ($632) a ton as of Jan. 12 while imported products traded at 810,000 won. In early October, imported hot-rolled steel was priced at 830,000 won a ton, 9.8% lower than 920,000 won for Korean-made products.

“We think prices at this level are virtually the same as unfair trading,” said a Korean steel company official.

Korean steelmakers, already hit by increased imports of low-priced steel products all last year, are considering filing a complaint with the Trade Commission of Korea’s Ministry of Trade, Industry and Energy to request officials to conduct anti-dumping investigations of Chinese and Japanese goods, according to industry sources.

A Hyundai Steel official said the company is looking into various measures to deal with growing imports, including filing an anti-dumping complaint.

A POSCO official said the company is also looking for ways to “protect” prices of its hot-rolled products.

Dongkuk Steel Mill Co. said it is carefully watching industry movements before taking any action.

Write to Hyung-Kyu Kim at khk@hankyung.com

In-Soo Nam edited this article.