The Korea International Trade Association announced on Jan. 7 that South Korean companies exported 2.3 million tons of steel products to the United States from January to November 2019. Last year’s total is estimated at 2.5 million tons, which is a nine-year low and less than their annual export quota. This has to do with worsened local market conditions and anti-dumping tariffs on individual products.
In 2018, the U.S. government invoked Section 232 of the Trade Expansion Act of 1962 and imposed additional 25 percent tariffs on steel imports. Then, the South Korean government accepted the quota equivalent to 70 percent of the average annual exports for the period of 2015 to 2017, 3.83 million tons, in exchange for tariff exemption so that South Korean companies can keep exporting their products without losing the U.S. market. Last year, however, the annual exports stood at approximately 65 percent of the quota.
Experts point out that this is because the companies adjusted their exports to the United States with local steel prices dropping. According to Hana Financial Investment, the local price of hot-rolled steel per 907 kg was US$580 last month, down more than 23 percent from a year earlier.
Anti-dumping and countervailing duties affected their exports, too. For example, pipe exports from South Korea to the United States totaled 720,000 tons from January to November last year, down 11.7 percent from a year ago, with the United States Department of Commerce imposing tariffs of more than 10 percent on the products including oil country tubular goods. The department imposed a countervailing duty of 58.68 percent on POSCO’s hot-rolled steel sheet products in 2016 before lowering it to 0.55 percent in June 2019. POSCO significantly reduced its exports to the U.S. market during the period.
At present, the local steel prices are showing no signs of rebounding while anti-dumping measures are continuing. The department recently fixed its anti-dumping tariff rate at 19.87 percent, about three times the previous rate, regarding thick plates imported from South Korea. In addition, its tariffs on pipes still remain high.