Not just China: Japan, South Korea push cheap steel as world reels
As the world reels from a flood of cheap Chinese steel, other countries including Japan and South Korea are selling products overseas at prices as much as a third lower than in their home markets, according to industry data and officials.
The underpricing by the world’s second and third biggest steel exporting countries underscores the pressure facing steelmakers around the globe as the industry grapples with chronic oversupply and sluggish demand.
India’s Tata Steel has blamed a flood of cheap steel imports for a decision to pull out of Britain, putting 15,000 jobs at risk, while one of Australia’s only two steelmakers, Arrium Ltd, has been placed in administration, a form of bankruptcy.
Japanese companies are selling steel overseas cheaper than in the domestic market partly to compete with China, said an official at a Japanese steel producer.
The price is also higher locally to cover specific delivery times and services including product quality that make it easier for customers to process them, the producer said.
H-beam, used in construction, is sold in Tokyo at 69,000 yen ($629) a tonne and is exported at $470 a tonne, free-on-board, according to data from Japanese and Chinese agencies that track the prices.
South Korean hot-rolled steel plate was exported at $522 a tonne on average last year, less than the domestic price of $581 a tonne.
Countries, responding to rising imports and complaints from local producers, are imposing protections and raising objections through international channels.
India in February set a floor price for imports of steel products to deter exporters from undercutting domestic mills, having seen imports from Japan and South Korea jump by almost half in April-February.
Japan has told India it will object to India’s minimum import price and a safeguard duty on imports of some steel products at a World Trade Organisation council meeting on Friday.
“By doing so, we want to prevent other countries from following India’s step,” which violates WTO rules, a Japanese government source told Reuters.
India has also started investigations into possible dumping of cheap steel products into the country by six nations including China, Japan and South Korea.
In Australia, Federal Industry Minister Christopher Pyne said the government had applied 41 anti-dumping measures to imported steel products in recent times, including 13 for China and eight for South Korea.
On Thursday, China scrapped some export subsidies on a range of products, including some specialty steel goods, in an effort to reduce trade friction with the United States.
Japan and South Korea sell over 40% of their steel output overseas, most of it to Asia. Last year, the two countries shipped a combined 75 million tonnes versus 112 million tonnes from China.