What is the impact of South Korea's anti-dumping duties on stainless steel in China and Indonesia 7.17% Mel 25.82% on stainless steel? [SMM analysis]

SMM9 March 15:

The Ministry of Finance announced on September 15 the rules on levying anti-dumping duties on stainless steel plate rolling in mainland China, Indonesia and Taiwan.

So far, one year after the Trade Commission launched the anti-dumping investigation in September last year (2020), the anti-dumping sanctions procedures for stainless steel plate rolled products have been completed against the above-mentioned countries and regions. According to Article 51 of the Customs Law, the Strategic Ministry of Finance may impose additional anti-dumping duties to protect domestic industries in the event of major damage to domestic industries caused by the dumping of imported foreign goods. The Economic and Trade Commission investigated and confirmed that the dumped stainless steel plates imported from mainland China, Taiwan and Indonesia caused significant damage to the domestic industry.

South Korea's Ministry of Finance decree No. 865 publishes the rules on the imposition of anti-dumping duties on stainless steel plate rolling produced in China, Indonesia and Taiwan, which will take effect for three years from the date of promulgation.

The specific tariff rates are as follows:

The tariff of Shanxi Taigang and related companies (TISCO, TISCO) is 23.69%, Angang 25.82%, and other Chinese enterprises 24.83%.

The tariff of Aoyama and related companies in Indonesia is 25.82%, while that of other Indonesian companies is 25.82%.

Taiwan's Lian Iron and Steel and its subsidiaries levied 9.47%, Huaxin Lihua levied 7.17%, and other Taiwanese companies levied a tariff of 9.07%.

However, if exporters raise the price of stainless steel plate rolled products imported into South Korea, they will not be subject to anti-dumping duties. As a result of the planning of the Chief Executive of the Ministry of Finance, the supplier who accepts the price modification commitment stipulated in Article 54 and Article 1 of the Customs Law shall not be the supplier to whom it is levied. However, if the promise of the price amendment is not fulfilled, the anti-dumping duty shall be levied.

According to SMM statistics, from 2017 to 2020, China's stainless steel coil exports accounted for an average of about 19% to South Korea, accounting for the largest proportion, followed by China's Taiwan region.

Since 2021, the monthly export volume of stainless steel to South Korea has ranked first, with an average of about 40,000 tons per month, accounting for about 10% of the total stainless steel exports. And since June, exports have doubled to 76200 tons, accounting for 13%, and fell slightly in July, but exports still accounted for 11%, with a year-on-year increase of nearly 150%. The cumulative export of stainless steel to South Korea from January to July 2021 is about 336000 tons, which is close to the export level of 406000 tons in 2021.

South Korea levies anti-dumping duties on stainless steel from China and Indonesia, but according to the export volume of various countries after anti-dumping in the past, the export volume is still dominated by demand, and the rules point out that if the price modification agreement is complied with, the anti-dumping duties can be exempted.

At present, due to the limitation of production and energy consumption in domestic stainless steel plants, stainless steel plants in many regions are in the stage of production reduction and supply decline. therefore, it is expected that domestic stainless steel prices will be limited by this anti-dumping in the near future. the trend of stainless steel still depends mainly on the release of downstream demand.

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