POSCO has voluntarily returned some of its US steel export quota this year. The move is based on the company's judgment that its has lost price competitiveness in the US market due to the high retaliatory tariffs levied on some of its products.
According to the steel industry on June 26, POSCO has decided not to export hot- and cold-rolled steel plates to the US this year. Accordingly, POSCO will return its allocated export quota. South Korea accepted the quota system on condition that the US will exempt Korean steel products from an additional 25% tariff.
POSCO concluded that it would be difficult to secure its export competitiveness due to high tariffs imposed on individual products. The US Department of Commerce slapped 57-percent countervailing tariffs on POSCO's hot-rolled steel plates and 59-percent tariffs on cold-rolled plates in 2016. Although product prices have been on the uptick this year, it will not be easy to find a buyer who will stomach retaliatory tariffs. In fact, prices of hot-rolled coils and cold-rolled coils jumped almost 20% from December, but they are not enough to offset countervailing duties.
Last year, POSCO's exports to the US accounted for only 3% of its total exports (16 million tons) so the damage from the high tariffs is not expected to be significant.