China faces anti-dumping duties from US and India

Inquiries : 0 - 2015/9/18 9:47:36

Five months ago, the European Union imposed anti-dumping duties on importsof flat stainless steel from China and Taiwan.

Now, severalsteelmakers from the US is seeking tariffs on American imports of the sameproducts from China, India, Italy, South Korea, and Taiwan to shun the possibleonslaught of cheap imports to the country.

Behind thepetition are steelmakers United States Steel Corp., Nucor Corp., Steel DynamicsInc., ArcelorMittal USA, AK Steel Corp., and California Steel Industries.

The steelmakerssaid that the petition for imposing anti-dumping duties on the aforesaidcountries came after continuous price decrease in the past months despiterobust demand.

On the otherhand, India has already imposed anti-dumping duties against flat stainless steel products coming from China and other Asian countries. Theanti-dumping duties ranging from $180 to $316 per tonne will be effective until2020.

Almost 40percent of India's annual ore consumption (1 million tonnes) comes from China.The other sixty comes from other ore producers in the Asian region such asTaiwan, Malaysia, and South Korea. However, the country's economic ministrysaid that this large consumption has resulted to a severe material injury asmost products from these countries are priced below fair market value.

"It's awelcome move and a necessary one to save the domestic industry which is at thesuffering end," N.C. Mathur, president of the Indian Stainless Steel Development Association, told Reuters.

In order toprotect the domestic steel industry, Indian finance minister Arun Jaitley saidthat there would be an increase in basic customs duty on steel to 15 per centfrom 10 per cent. This, however, would not lead to any change in basiceffective rates.

In contrast, theChinese government is encouraging local steel company owners to retaliate byfiling lawsuits against foreign entities trying to stop them from participatingin the global commerce.

"Weencourage Chinese steelmakers and related businesses to actively participate incountersuits, and protect their legitimate interests according to the WorldTrade Organization rules," China's commerce minister told The WallStreet Journal.

Stainless steel prices outlook

According to stainless steel market consulting firm MEPS, industry experts and marketanalysts are still divided on the current condition of and short-term outlookfor the stainless steel market.

Sales to theautomotive supply segment are consistently positive, while demand from the oilindustry has remained weak since commodity values began to fall last year.

However, MEPSsaid that a brief recovery in LME nickel values the last two months helped alloy extras for grade 304 materials to climb again in June. Thus, therecould be a price upturn for stainless steel in 2016.

In the sameyear, China is expected to purchase more nickel to support its growingstainless steel production. Nonetheless, since the ore prohibition in Indonesiais showing no signs of being lifted and supplies from the Philippines is fastapproaching exhaustion, Chinese companies will continue to seek alternativesoutside the region.

One of theprospects is Russian nickel company Amur Minerals Corporation (OTC: AMMCF),which has a projected nickel ore production of 90 million tons. Its shares roseby almost 20 percent last week after completing the ￡300,000 pre-productionlicense payment required of it to cover the assignment of production rights forall recoverable metals at its Kun-Manie nickel reserve in Russia.

China'sincreasing demand for refined nickel is considered by some base metal observersas the main driver for its rising values. It will be supported by the ongoingIndonesian ore ban and the continuously decreasing global supplies outside theAsia-Pacific region.

For this year,analysts and market players see no price rebound for nickel. However, somenickel miners still hope for the emergence of a supply deficit in theshort-to-medium term. According to them, if this happens before the year ends,there can be a modest upward trend in nickel values until the second quarter of2016.