China starts AD probe into stainless semis, flats

China's Ministry of Commerce (MoC) is launching a preliminary antidumping investigation into imports of stainless steel semis (slabs and billets) and hot-rolled stainless coil and plate from Indonesia, the European Union, Japan and South Korea, according to an official notice posted on its website Monday.

China’s Ministry of Commerce (MoC) is launching a preliminary antidumping investigation into imports of stainless steel semis (slabs and billets) and hot-rolled stainless coil and plate from Indonesia, the European Union, Japan and South Korea, according to an official notice posted on its website Monday.

The investigation is in response to an application lodged on June 22 by Shanxi Taigang Stainless Steel Co, a major stainless maker headquartered in North China’s Shanxi province, and four other stainless makers, which alleged that exporters shipped the stainless products to China at prices below fair value, harming their business.

Supporting the claim are Baosteel Stainless Steel Co from Shanghai, Beihai Chengde Stainless Steel Co from Southwest China's Guangxi Zhuang Autonomous Region, Gansu Jiu Steel Group Hongxing Iron and Steel Co from Northwest China’s Gansu province, and Angang Lianzhong Stainless Steel Co from South China's Guangdong province. The AD investigation period spans January 1, 2017 to December 31, 2017, the announcement said.

“We hope (the MoC) levies punitive tariffs at 30%-50% on the items in response (to the petition) to protect the domestic market, and that all four countries and regions are slapped with the same level of duties,” a Taigang Stainless Steel official said.

In their claim, the petitioners did not allege the dumping margins for imports but they said import volumes from the four shippers had surged since 2014, causing material injury to China’s domestic industry, according to the announcement. What is clear is that of the four, the main target is Indonesia.

China’s stainless steel domestic market is saturated now, explained another Taigang Stainless official. “Nevertheless, imports of stainless goods are still on the rise, mainly owing to the fact that some domestic steelmakers sent feeds back from Indonesia based on lower production costs there after their upstream smelters came into operation,” he told Mysteel.

China imported 517,000 tonnes of targeted stainless products during January-March, up 599% or 443,000 tonnes on year, the petitioners’ application quotes data from China’s General Administration of Customs showing.

Within that, imports of hot-rolled stainless flats and semis from the four countries reached 514,000 tonnes, a more than six-fold increase on year, the data shows. Imports from Indonesia recorded at 445,000 tonnes, accounting for 86% of the total.

In June, Tsingshan Holding, China’s top stainless producer, commissioned the third and final phase of its large stainless rolling plant in Indonesia’s central Sulawesi province, as Mysteel reported, with the 1 million tonnes/year facility taking total capacity at the plant in central Sulawesi’s Morowali County to 3 million t/y. Another Chinese firm busy elsewhere in Sulawesi is Yancheng-based top nickel pig iron producer Jiangsu Delong Nickel Industry Co, headquartered in East China’s Jiangsu, which is constructing a 3 million t/y stainless steel mill there that will be on stream by 2019, Mysteel notes.

Officials from Tsingshan and Jiangsu Delong could not be reached for comment but one industry watcher predicted some impact were penalties to be imposed. “This move will definitely impact imports in the event of antidumping duties being levied, while some traders and steelmakers, in actual need of semis, may dodge any duties by shipping to another country and re-exporting from there to China,” suggested Song Minjia, a nickel analyst from Guangzhou Futures.

Already ripples are being felt. Industry watchers Tuesday attributed a slight uptick in domestic stainless prices to market jitters that supplies of semis and flats may tighten as a result of the trade case.

Written by Thea Feng, fengyx@mysteel.com
Edited by Russ McCulloch, russ.mcculloch@mysteel.com

Table-1

China's output of stainless billet/slab and hot-rolled stainless coil/plate Unit: '000 tonnes
Items	2014	2015	2016	2017
Output by petitioner companies (Taigang & supporters)	743,5	838,1	914,7	936
Total output	1,270	1,196	1,399	1,383
Petitioners’ share of total output	58.54%	70.08%	65.38%	67.70%

Data from Stainless Steel Council of China Special Steel Enterprises Association (CSSC)

Table-2

Imports of stainless billet/slab and hot-rolled stainless coil/plate Unit: tonnes
Countries and regions	Jan-Mar 2018	Jan-Mar 2017	2017
Total	517,247	74,298	703,105
EU	9,174	9,149	31,837
Japan	13,053	13,210	55,388
South Korea	47,200	36,508	182,323
Indonesia	445,218	12,000	420,336
Four countries and regions	514,646	70,866	689,883

Data from China’s General Administration of Customs