Chinese low-cost steel plate imports pose challenges

Hyundai Steel’s Steel Plate. (Hyundai Steel)

South Korean shipbuilding companies are facing potential challenges as Korean steelmakers, reeling from an influx of cheap Chinese steel plates, filed anti-dumping complaints against Chinese manufacturers.

Steel plates are thick steel sheets used to build ships such as container ships and oil tankers.

According to sources from the shipbuilding industry on Monday, the Korea Offshore & Shipbuilding Association (KOSHIPA) recently contacted major domestic shipbuilders individually to assess their reliance on Chinese steel plates and their future import plans. It also closely examined the potential impact if it were to impose anti-dumping tariffs.

The association’s comprehensive investigation of its member companies comes in response to Hyundai Steel Co.’s July 2024 request to the Ministry of Trade, Industry, and Energy (MOTIE) to raise import barriers by filing an anti-dumping petition against Chinese steel plates.

With the shipbuilding industry booming once again, demand for steel plates from shipbuilders has increased significantly. But the steel industry resorted to filing anti-dumping complaints as the influx of cheap Chinese imports hampers the sale of Korean steel products.

Hyundai Steel took the initiative in filing the complaint due to the growing damage from the surge in Chinese steel imports caused by China’s delayed economic recovery and overproduction.

The Korea Trade Commission under the MOTIE is expected to decide as early as September 2024 whether to initiate an investigation. As this is the first anti-dumping case in the steel plate sector, both the steel and shipbuilding industries are paying close attention to the decision.

Low-priced Chinese steel is also a problem in Europe. According to the Financial Times (FT) on Sunday (local time), European steelmakers have called on the European Commission to move against Chinese steel imports, including imposing tariffs, as the influx of Chinese steel is pushing prices in Europe below the cost of production.

China, the world’s largest steel producer, is expected to export up to 110 million tons of steel in 2024, the country’s highest total since 2016.