The business environment of South Korean steel companies is deteriorating amid U.S. import quotas and tariffs, EU safeguard measures, and China’s investigation into steel products from four countries including Korea.
The Chinese Ministry of Commerce announced on July 23 that it has initiated an anti-dumping investigation into stainless steel billets and hot-rolled stainless steel sheets from South Korea, Japan, Europe and Indonesia.
Earlier, a Chinese company made a request for the investigations and the ministry found that the products from the four regions recorded a market share of over 50% from 2014 to 2017. Last year, the billets and sheets imported from the regions accounted for 98% of China’s total import volume of the same products.
The anti-dumping investigations are scheduled to continue for one year. “A preliminary determination is likely to be made in three to four months, with the final tariffs for Korean exporters expected to be set through negotiations,” said an industry source.
South Korean steel companies are facing worsening market conditions at home as well. The domestic car market is shrinking and the demand for automotive steel sheets is on the decline with the United States poised to impose high tariffs on imported cars. Besides, the shipbuilding industry is continuing to struggle and the conflict between the shipbuilding and steel sectors over an increase in thick plate price has yet to be resolved. The South Korean government may raise the price of electricity used for industrial purposes and many other clients such as construction companies are going through hard times, too.