Hyundai Steel Seeks Antidumping Investigation Over Chinese and Japanese HRC Imports
In a significant move for the South Korean steel industry, Hyundai Steel, one of the nation's largest steel producers, has formally submitted an antidumping complaint to the Trade Commission of the Ministry of Trade, Industry, and Energy in South Korea. The company alleges that low-priced hot-rolled steel coils from China and Japan have caused substantial damage to its business operations. The steel giant has requested that the South Korean government launch a formal investigation into the imports of HRC originating from these two countries. The application is currently under review and is expected to be officially filed by early March 2025.
This move by Hyundai Steel comes amid concerns about the steel market in South Korea, where the surge in low-priced imports from neighboring countries has raised alarms regarding unfair competition. The company argues that these imports, particularly from China and Japan, are undermining its ability to compete in both domestic and international markets, particularly as it struggles with a lack of price competitiveness and shrinking global demand for steel.
The Rise of Low-Priced HRC Imports in South Korea
From January 2021 to January 2025, South Korea imported 14.98 million metric tons (mt) of hot-rolled steel coils (HRC) in the MTI 6132 category. A large portion of this supply came from Japan and China, which together accounted for more than 90% of total imports during this period. Specifically, South Korea imported 7.53 million mt from Japan and 6.49 million mt from China. The dominance of these two countries in South Korea’s HRC market has raised concerns among local steelmakers like Hyundai Steel, which feel that their business operations are being undermined by unfairly low-priced imports.
The complaint by Hyundai Steel highlights a broader issue in the South Korean steel market, where domestic production faces stiff competition from foreign producers offering HRC at lower prices. Hyundai Steel claims that the influx of inexpensive steel coils is causing severe damage to their operations and business profitability.
China’s Steel Industry Response to Allegations
In response to the allegations, China’s Ministry of Foreign Affairs has defended its steel industry, dismissing claims that the country’s steel exports are the primary cause of the current difficulties faced by South Korean steelmakers. China’s Foreign Ministry Spokesperson Lin Jian argued that China’s steel industry primarily serves domestic demand and that there is no state subsidy policy designed to stimulate steel exports. He emphasized that China’s steel export proportion has remained low, accounting for only about 5% of global steel exports, far less than countries like Japan and South Korea, whose export figures are much higher.
Lin Jian also pointed out that, despite China’s steel production and capacity accounting for nearly half of the world’s total, China’s steel consumption is similarly high, making the global impact of its steel exports relatively minimal. He reiterated that overcapacity within the global steel market is a common issue faced by many countries, driven primarily by a slow recovery in global economic development and shrinking demand for steel, particularly in developed nations.
The Global Overcapacity Issue and its Impact
The issue of global overcapacity has long been a point of contention in the international steel market. Overcapacity refers to the situation where steel production exceeds global demand, resulting in excessive steel output that causes price reductions and increased competition among producers. This phenomenon has contributed to the falling prices of steel, particularly in key markets like South Korea.
The China Iron and Steel Association (CISA) has urged all stakeholders in the steel industry to approach the issue of overcapacity objectively, recognizing that it is a historical and global challenge. CISA called for joint action to address the overcapacity problem in a fair and balanced way, considering the interests of all parties involved, including steel producers in China, Japan, and South Korea.
The trade tensions between steel giants like Hyundai Steel and foreign producers reflect the global challenges that the steel industry faces, from price instability to competition caused by subsidized production and unbalanced market conditions. As countries around the world work toward addressing these complex issues, trade measures like antidumping investigations will likely play a key role in shaping the future of the global steel market.
The Antidumping Investigation Process
South Korea’s Trade Commission will now review Hyundai Steel’s complaint, assessing whether the imports of Chinese and Japanese HRC are being sold at unfairly low prices in the South Korean market, thus causing harm to Hyundai Steel. The antidumping investigation is expected to be launched by early March, with the Trade Commission gathering evidence and analyzing the pricing and market impact of these imported steel products.
The investigation will consider factors such as whether the imported steel is being sold below fair market value, whether this underpricing has caused significant damage to the South Korean steel industry, and whether government subsidies in China and Japan are contributing to the issue. If the Trade Commission concludes that dumping has occurred, it could impose tariffs or anti-dumping duties on the imports from China and Japan, effectively raising the cost of these steel products in South Korea.
Conclusion of the Complaint
Hyundai Steel’s complaint comes at a time when the global steel industry is facing numerous challenges, from overcapacity to shrinking global demand. The antidumping investigation, if successful, could provide relief to South Korean steelmakers and serve as a precedent for addressing trade imbalances in the steel industry. Meanwhile, the issue also underscores the broader, long-term challenges faced by the steel industry in China, South Korea, and other leading producers, all of whom are grappling with shifting global trade dynamics.
Key Takeaways:
•Hyundai Steel has filed an antidumping complaint against low-priced hot-rolled steel coils (HRC) from China and Japan.
•China and Japan account for over 90% of South Korea’s total HRC imports, with 7.53 million metric tons coming from Japan and 6.49 million metric tons from China.
•The Trade Commission of South Korea is reviewing the complaint, with an official investigation expected to begin by early March 2025.
•China’s Ministry of Foreign Affairs has defended its steel exports, emphasizing that China’s steel industry mainly caters to domestic demand and that its steel exports account for only 5% of the global total.
•The issue of global overcapacity is a significant concern, with CISA calling for joint action to address the challenge.
•The antidumping investigation could lead to tariffs or duties on imports from China and Japan, providing relief to local steelmakers like Hyundai Steel.
This investigation is likely to shape future trade policies and the competitiveness of steel markets in South Korea, China, and Japan.
