China shrugs off US penalties on Vietnam flats exports

The US Department of Commerce's final affirmative ruling announced last week on corrosion-resistant steel (CORE) and certain cold-rolled flat products imported from Vietnam - which slaps hefty penalties on these for their incorporation of hot rolled and cold rolled coil substrate originating in China - is being brushed aside by Chinese industry insiders.

The US Department of Commerce’s final affirmative ruling announced last week on corrosion-resistant steel (CORE) and certain cold-rolled flat products imported from Vietnam – which slaps hefty penalties on these for their incorporation of hot rolled and cold rolled coil substrate originating in China – is being brushed aside by Chinese industry insiders.

“The ruling won’t weigh heavily on China’s steel industry as exports of HR substrate to Vietnam are limited,” a Shanghai-based steel trader shrugged.

US steelmakers had long argued that Vietnamese re-rollers were helping Chinese mills dodge the antidumping and countervailing duties penalties Washington had imposed on Chinese CORE and CR steel since 2015 by using Chinese substrate, as Mysteel has reported.

The DoC’s ruling means that US Customs and Border Protection will require cash deposits on imports of CORE and CRC produced in Vietnam using Chinese-origin steel. The AD and CVD cash deposit rates on imports of Vietnamese CORE incorporating China-origin substrate are set at 199.43% and 39.05% in line with those levied three years ago against imports of CORE from China. Customs will also collect AD and CVD cash deposits on CRC imports at rates of 199.76% and 256.44%. Vietnamese exporters seeking exemptions must certify that they are using substrate originating outside of China, according to the DoC’s official release.

As of now, China’s Ministry of Commerce has not given any official response to Washington’s ruling but according to Chinese Customs data, China exported 3.38 million tonnes of HR sheet and coil to Vietnam last calendar year, off 22% from 2016.

“Vietnam is not a very core export destination for Chinese steel products, and China’s steel exporters have never relied much on shipments to one single country,” the Shanghai trader explained. “(US steel makers) are trying to kill two birds with one stone for complaining about China’s competitive steel prices internationally while on the other hand, penalizing the steel industry of Southeast Asia, one of the hottest steel markets in the world.”

He added that Vietnamese re-rollers may suffer if they have to seek suppliers of other substrates should they want to export to the US because feeds from other origins will likely be more expensive than those from China.

Written by Venus Wang, wangyi@mysteel.com
Edited by Russ McCulloch, russ.mcculloch@mysteel.com