Controversy of Iron Bars
While Korean lawmakers recently proposed the Basic Construction Industry Act that makes it obligatory to clarify construction materials’ places of origin against inferior steel products from China, it is being pointed out whether or not the system to declare the places of origin of iron reinforcing rods is proper. It has been discussed that Korea needs to cut facilities which produce iron reinforcing rods.
This is because “Korean made” marks can be attached on billets, semimanufactured iron bars imported to Korea from China only after they undergo a simple rolling process.
But iron bar manufacturers claim that since unique rolling technology is used to roll out iron bars, it is appropriate to see such iron bars as Korean-made ones even though Chinese-made billets are used.
This controversy over the country-of-origin label rule draws a lot of attention at a time when a global glut of steel products has been prompting a flood of low-priced steel products into Korea from China. According to the steel industry on September 20, Korea has a total of 12 firms that produce iron bars without their own electric furnaces after making purchases of billets from other companies.
Such companies leave other companies production of billets which belongs to the upstream manufacturing process and carry out sample rolling which is part of the downstream process. They produce iron rods by purchasing billets, semimanufactured products in Korea or from abroad such as China.
The problem is that iron rods produced by such rolling companies with low-priced billets from China among others are selling with “Made in Korea” labels on. Rolling work includes heating and cooling processes. But the work cannot change the components of billets. This is the reason why it is debated whether iron bars based on billets from China should be called Chinese-made or Korean made.
Furthermore, it is expected that a sharp increase in the import of billets from China these days will considerably fuel interest in this controversy.
According to the Korea Iron & Steel Association, Korea imported 660,000 tons of billets made of general and other special steel for production of iron bars in 2014. But the volume soared to 810,000 tons last year. “We cannot say that all of such billets went into production of iron rods,” said a representative of the Korea Iron & Steel Association. “But it is true that Korea’s billet imports spiked. Most of them were from China.”
But iron bar manufacturers are calling the notion absurd. They say that the final steel products are produced by Korean companies with rolling technology in Korea so the products should be considered Korean-made even though their work is simple rolling.