Dongkuk CM's Complaint Against Influx of Chinese Steel Plates: A Threat to Market Stability
Dongkuk CM, a prominent South Korean steel company, has voiced grave concerns regarding the massive import of low-priced Chinese galvanized and color-coated steel plates into the local market. These products, used primarily in the construction sector for applications such as roofs, walls, and signboards, have been flooding the domestic market at a significantly reduced price compared to locally manufactured steel plates. Dongkuk CM argues that this influx is not only distorting market prices but also threatening the safety of buildings due to the substandard quality of some imported products.
The issue arises from the increasing dominance of Chinese imports in the construction-use galvanized and color-coated steel plates market, which, according to Dongkuk CM, have been undermining local manufacturers. These imported products are often sold at much lower prices, making it difficult for domestic producers to compete, and as a result, they risk being driven out of the market. Additionally, the quality concerns surrounding these Chinese products, particularly the thin coating, are contributing to safety issues, as the coatings fall significantly below the required standards for construction materials.
The Domestic Market Landscape
The market for construction-use galvanized and color-coated steel plates in South Korea was valued at approximately 2.8 million metric tons in 2024, generating around 3 trillion won. Of this, more than 1 million metric tons were imported, with over 90% of these imports originating from China. This heavy reliance on Chinese steel has raised alarms among South Korean manufacturers, who are now struggling to maintain market share amidst this flood of inexpensive foreign products.
The increase in imports of Chinese steel plates is particularly troubling because the volume of such imports has surged by 34.2% over the past three years. Specifically, the import of galvanized and color-coated steel plates has risen from 760,000 metric tons to 1.02 million metric tons annually. Furthermore, the price per ton has decreased dramatically from $952 to $730, a 23.3% reduction. Such a significant drop in pricing is seen as unsustainable for the local steel producers and is viewed as an attempt to undermine the domestic market.
Concerns Over Product Quality and Safety
Beyond pricing, Dongkuk CM is particularly worried about the quality of Chinese imports, especially in terms of their coating thickness. According to South Korean construction law, the legal requirement for coating thickness on construction materials is 90 grams per square meter (g/㎡). However, Dongkuk CM claims that most of the Chinese color-coated steel plates circulating in the domestic market have a coating thickness of only 60 g/㎡, which is significantly lower than the legal requirement.
This reduction in coating thickness compromises the durability and safety of the steel plates, as the thinner coating makes the materials more susceptible to corrosion, especially in harsh weather conditions. This raises the risk of structural failures in buildings and infrastructure, which could lead to severe safety hazards.
The Call for Urgent Regulatory Action
Dongkuk CM, alongside its industry peers such as SeAH CM, has emphasized the urgent need for trade regulations to protect the domestic steel industry. The company plans to file an anti-dumping complaint to prompt the South Korean government to impose protective tariffs on Chinese imports. The goal is to ensure that the prices of galvanized and color-coated steel plates remain competitive without the market being flooded by substandard, low-priced imports that could harm the industry and compromise public safety.
Dongkuk CM’s complaint highlights the need for strategic trade responses, which would involve phased trade regulations beginning with the final steel products. These regulations would aim to minimize friction with neighboring countries, such as China, while still ensuring a fair and competitive environment for South Korean steel manufacturers. By implementing such regulations, Dongkuk CM believes it can help maintain the stability of the local steel market while fostering coexistence within the broader steel industry.
Key Takeaways:
• Dongkuk CM has filed a complaint over the influx of low-priced Chinese galvanized and color-coated steel plates that are harming the domestic steel industry.
• The import of Chinese steel has surged by 34.2% over the past three years, with over 90% of the imports in South Korea coming from China.
• The price of Chinese steel plates has dropped by 23.3%, from $952 per ton to $730 per ton, contributing to a distorted local market.
• Quality concerns have been raised, with Chinese steel plates falling below the legal coating thickness requirement of 90 grams per square meter (g/㎡), compromising their durability and safety.
• Dongkuk CM is calling for anti-dumping measures and trade regulations to protect local manufacturers and ensure market stability.
• The company plans to collaborate with other industry players such as SeAH CM to push for regulatory action before the first half of the year.
This case highlights the ongoing challenges faced by South Korea's steel industry and underscores the growing importance of trade regulations to protect local producers from unfair competition while ensuring the safety and quality of construction materials.
