Articles in Category: Anti-Dumping

In the ongoing dispute between Japan and India over cheap steel imports, Japan has requested that the World Trade Organization set up a panel to resolve the dispute.

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Early indications are that the move will be opposed by India. Japan’s request comes after New Delhi imposed safeguard duties on several iron and steel products, which India claimed violated global trade rules.

India’s finance ministry imposed definitive safeguard duties on imports of hot-rolled flat products of non-alloy steel in coils to counter a surge in imports from several countries, including Japan. India’s stand has been that such cheap imports “caused injury to domestic steel industries.”

New Delhi would have taken recourse to the safeguard measures on grounds that the import surge in hot-rolled flat products is the result of unforeseen developments. India levied 20% safeguard duties ad valorem minus anti-dumping duties on Japanese imports of hot-rolled flat products between September 2015 and September 2016; 18% between September 2016 and March 2017; 15% between March 2017 and to expire by September 2017; and 10% for a future period in September 2017 and March 2018.

As reported by MetalMiner, despite the excellent trade relations between the two nations, Japan is unhappy with India’s decisions to place a minimum import price and other assorted duties to protect its domestic steel industry. Japan claims this has halved its steel exports to India in the last year.

Japan requested the panel came after India’s failure to provide “convincing reasons” for its safeguard and anti-dumping actions. It’s said the request will come up before the dispute settlement body (DSB) meeting today.

According to a report in the Financial Express, India opposes Japan’s move. Quoting experts, the report said since WTO cases can be settled with rulings that were “prospective,” any adverse judgment would not affect India significantly.

In a parallel development, there are reports coming in that India would use make it compulsory for Indian customers to use domestically produced steel, to stop inroads made by steel products from other countries including China.

India may soon mandate the use of local steel in government infrastructure projects worth billions of dollars, pitching it as a WTO-compliant protectionist measure.

Quoting news agency Reuters, the report said the Indian Government expects to move to boost sales of local companies such as JSW Steel and Tata Steel and eventually attract global steelmakers such as ArcelorMittal and POSCO to invest in the country.

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India is the world’s third-largest steel consumer, but its current level of capacity utilization by domestic steel producers is below 80%.

The Department of Commerce announced its affirmative final determination in the anti-dumping duty investigation of imports of South Korean ferrovanadium.

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For the purpose of an anti-dumping investigation, dumping occurs when a foreign company sells an imported product in the U.S. at less than its fair value.

Commerce found dumping by mandatory respondent, Korvan Ind. Co., Ltd., at a final margin of 3.22%. Additionally, based on the application of adverse facts available, Commerce found that dumping has occurred by mandatory respondents, Fortune Metallurgical Group Co., Ltd. and Woojin Ind. Co., Ltd., at final margins of 54.69%. Commerce assigned a final dumping margin of 3.22% to all other producers/exporters in Korea.

As a result of the final affirmative determination, Commerce will instruct U.S. Customs and Border Protection to collect cash deposits based on these final rates.

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The petitioners for this investigation are the Vanadium Producers and Reclaimers Association — a Washington DC-based trade group — and its members: AMG Vanadium LLC of Ohio; Bear Metallurgical Company in Pennsylvania; Gulf Chemical & Metallurgical Corporation of Texas; and Evraz Stratcor, Inc. in Arkansas.

Speaking at S&P Global Platts’ recent Steel Markets North America conference, noted trade attorney Alan Price of the Washington law firm Wiley Rein said the World Trade Organization case that the federal government filed on behalf of aluminum producers against Chinese overproduction of the light metal in January, will essentially serve as a guide for other industries looking to challenge state-subsidized companies’ overproduction for export in the People’s Republic.

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“The solutions to Chinese overcapacity are to follow the money and see who’s subsidizing it,” said Price, who has represented several U.S. industries in anti-dumping and countervailing duty legal actions against Chinese producers, as well as WTO disputes. “China has not fundamentally reformed its excess capacity. The rest of the world’s production has remained stable, but the explosion in Chinese capacity is still there.”

Alan Price

Alan Price, image courtesy of Wiley Rein

Price said the aluminum case fundamentally attacks the mechanism China uses to back up failing businesses, the availability of subsidized money in China known as “money for metal” on the municipal, state and federal level there.

“The WTO case involving aluminum, challenges, fundamentally, the Chinese subsidization system,” Price said. “It goes after the financial systems of China and how everything is financed. In aluminum you can track all the companies involved. There are around 10 and it’s a much more understandable beast, much more understandable problem than the vastness of the Chinese steel industry. This case will fundamentally decide if China will be allowed to prop up failing businesses.” Read more

U.S. M3 grain-oriented electrical steel prices dropped slightly with the M3 index moving from 200 to 197.

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Though U.S. prices dipped slightly, China’s Baosteel announced a price hike for GOES close to $40 per metric ton, according to a recent TEX Report. Although the Chinese have led recent GOES and other steel product price hikes, others have not necessarily followed. Nevertheless, Chinese steel prices set the floor for global steel prices.

GOES MMI

Now that the Trump administration has begun to settle in, market observers have paid close attention to trade actions within the metals industry, particularly the cold-rolled coil circumvention case and most recently a case filed by the Aluminum Association against China involving aluminum foil. Both the domestic steel and aluminum industries have pursued trade cases to address overcapacity concerns.

GOES Prices and NAFTA

GOES markets follow some of these same patterns. Back in 2013, GOES from China accounted for about 10% of total U.S. GOES imports (by tonnage). Clearly, the trade cases filed by the domestic producers at the time limited Chinese imports, but that trade case sought to stop other countries’ imports as much as China’s.

Herein lies a big difference between the GOES case and the aluminum case as well as the prior flat-rolled product steel cases. The GOES trade case did not result in any finding of injury, so no anti-dumping and countervailing duties were assessed. Instead, domestic power equipment manufacturers shifted their global supply chains to source GOES globally and purchase transformer parts and wound cores from NAFTA countries.

Some have speculated that two years ago, the addition of two new harmonized tariff codes for both transformer parts (8504.90.9546) and wound cores (8504.90.9542) would set the stage for future trade cases brought by the lone domestic GOES producer. We think this looks like a “stretch” and, legally, we’re not even sure there is a case to be had as AK Steel currently does not manufacture transformer parts or wound cores.

Import volumes for wound cores have modestly increased, but imports for transformer parts have actually declined:

GOES imports from 2015 to today

GOES imports from 2015 to today. Source: Lisa Reisman/MetalMiner.

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The Aluminum Association, the group that represents the North American aluminum production industry, today filed a trade enforcement action against the People’s Republic of China seeking relief for domestic producers of aluminum foil. This action is part of the industry’s broad trade strategy to address Chinese overcapacity throughout the value chain.

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The Aluminum Association’s Trade Enforcement Working Group filed anti-dumping and countervailing duty petitions alleging that dumped and subsidized imports of aluminum foil from China are causing material injury to the domestic industry.

“Today’s action marks the first time the Aluminum Association has filed unfair trade cases on behalf of its members in its nearly 85-year history,” said Heidi Brock, President & CEO of the Aluminum Association. “This unprecedented action reflects both the intensive injury being suffered by U.S. aluminum foil producers and also our commitment to ensuring that trade laws are enforced to create a level playing field for domestic producers.”

The anti-dumping margins alleged by the domestic industry range from 38% to more than 134% of the value of the imported aluminum foil. The domestic industry’s countervailing duty petition alleges that Chinese producers benefit from 27 separate government subsidy programs.

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The industry group previously said it wanted to avoid filing the trade actions if it could via meetings with its Chinese counterparts but, apparently, there simply was not enough progress in curtailing injurious imports.

The Department of Commerce announced placed preliminary anti-dumping duties on imports of steel concrete reinforcing bar (rebar) from Japan, Taiwan, and Turkey yesterday.

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“Dumping” is determined to occur when a foreign company sells a product in the U.S. at less than its fair value.

Japan Hit Hardest

In the Japan investigation, mandatory respondents Jonan Steel Corporation and Kyoei Steel Ltd. both received preliminary dumping margins of 209.46%. Commerce assigned the preliminary margin of 209.46% to all other producers/exporters of steel concrete rebar from Japan.

In the Taiwan investigation, mandatory respondents Power Steel Co., Ltd. and Lo-Toun Steel and Iron Works Co., Ltd. received preliminary dumping margins of 3.48% and 29.47%, respectively. Commerce assigned the preliminary margin of 5.49% to all other producers/exporters of steel concrete reinforcing bar from Taiwan. As a country, Taiwan got off relatively easy in this dumping case, considering the margins we just saw for Japan.

Rebar foundation pour in Wrigley Field parking lot.

With rebar a coveted product for large construction projects, it was only a matter of time until dumping was investigated. Source: Jeff Yoders/MetalMiner.

In the Turkey investigation, mandatory respondents Habas Sinai ve Tibbi Gazlar Istihsal Endustrisi A.S. and Icdas Celik Enerji Tersane ve Ulasim Sanayi A.S. received preliminary dumping margins of 5.29% and 7.07%, respectively. Commerce assigned the preliminary margin of 6.20% to all other producers/exporters of steel concrete reinforcing bar from Turkey.

Tariffs for Turkey and Taiwan

This dumping investigation is a separate one from the Turkish rebar countervailing duties investigation we wrote about last week. Countervailing duties are for government-subsidized products, “injurious dumping” is importing and “dumping” products regardless of cost of production. Got that? Good.

Rebar is now a traded steel product on several international exchanges so it was only a matter of time before dumping of it became a hot-button issue for governments with strong infrastructure markets. In 2015, imports of steel concrete rebar from Japan, Taiwan, and Turkey, were valued at an estimated $108.69 million, $17.57 million, and $674.40 million, respectively.

Commerce will instruct U.S. Customs and Border Protection to collect cash deposits based on these preliminary rates. The petitioners for this investigation are the Rebar Trade Action Coalition and its individual members: Byer Steel Group, Inc. of Ohio, Commercial Metals Company in Texas, Gerdau Ameristeel U.S. Inc. down in Florida, Nucor Corporation in Charlotte, N.C., and Steel Dynamics, Inc. of Indiana.

As mentioned above, the merchandise subject to these investigations is steel concrete rebar imported in either straight length or coil form regardless of metallurgy, length, diameter, or grade or lack thereof. Subject merchandise includes deformed steel wire with bar markings (e.g., mill mark, size, or grade) and which has been subjected to an elongation test.

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The subject merchandise includes rebar that has been further processed in the subject country or a third country, including but not limited to cutting, grinding, galvanizing, painting, coating, or any other processing that would not otherwise remove the merchandise from the scope of the investigations if performed in the country of manufacture of the rebar.

Commerce is scheduled to announce its final determinations on or about May 16, 2017, for Japan and Turkey, and July 6, 2017, for Taiwan.

The Trump administration is developing a national trade policy that would seek to diminish the influence of the World Trade Organization in the U.S. and champion American law as a way to take on trading partners it blames for unfair practices, according to a draft document reviewed by The Wall Street Journal.

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In his speech to a joint session of Congress Tuesday night, Trump said he wouldn’t let American workers and businesses be taken advantage of. “I believe strongly in free trade but it also has to be fair trade,” he said.

The Trump administration’s trade policy is forming. Source: Adobe Stock/Argus.

Some business groups and republicans who back traditional trade policy have hoped the new administration would moderate its most aggressive policy proposals to protect U.S. industries.

Departure From Previous Trade Policy

However, the policy contained in a draft document due to be published any day now, represents a dramatic departure from the Obama administration, which emphasized international economic rules and the authority of the Geneva-based WTO, an international body that regulates trade and resolves disputes among its members. Armed with what it sees as a broad mandate, the administration is moving forward with rules that would favor U.S. law over the conflict resolution mechanisms of the WTO. Read more

The Institute for Supply Management said its manufacturing index rose to 57.5% from 56% in January, topping the MarketWatch-compiled economist consensus of 56.5%.

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Any reading above 50% indicates improving conditions.This is the highest reading since August 2014. 17 Of 18 U.S. manufacturing industries reported growth in February.

China Upset About EU Plate Steel Duties

China expressed concerns on Tuesday over what it said was increasing protectionism after European Union regulators imposed new duties on steel imports from the world’s biggest producer.

The European Commission is seeking to protect EU steelmakers while avoiding tensions with Beijing, which it sees as a possible ally against protectionism and climate change.

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It imposed definitive anti-dumping duties of between 65.1% and 73.7% on imports of heavy plate non-alloy or other alloy steel from China on Tuesday, confirming provisional tariffs set in October.

We are used to steel producers and their trade bodies raising objections to steel imports from China here in Europe, even from Russia and Ukraine but here’s a new one: Iran.

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Reuters reported last week that Steel lobby group Eurofer said Iranian exports to Europe had leapt to just over 1 million metric tons annually, putting the country just behind India at 1.9 mmt, and third to China at 5.7 mmt last year. Read more

The Department of Commerce placed preliminary countervailing duties on Turkish steel rebar imports today, the trade case is ongoing.

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Countervailing duties are placed on products found by Commerce to have been injuriously subsidized by foreign governments importing said products into the U.S. The definition of a countervailable subsidy is financial assistance from foreign governments that benefits the production of goods from foreign companies and is limited to specific enterprises or industries, or is contingent either upon export performance or upon the use of domestic goods over imported goods.

Commerce calculated a preliminary subsidy rate of 3.47% for the mandatory respondent Habaş Sinai ve Tibbi Gazlar Istihsal Endüstrisi A.Ş. (Habas).

There  an existing countervailing duty on rebar from the Republic of Turkey (79 Fed. Reg. 65,926 (Dep’t Commerce Nov. 6, 2014). This new countervailing duties investigation on rebar from Turkey covers only rebar produced and/or exported by those companies that are excluded from the 2014 Turkey order. Read more