MBIE launches two new investigations into claims of Chinese steel dumping

Monday 16th October 2017

The Ministry of Business, Innovation and Employment is taking a new look at claims Chinese steel imports are being dumped in the local market after Australian-owned New Zealand Steel complained it's being unfairly undercut by Asian rivals.

The ministry is investigating the alleged dumping of reinforcing steel bar and coil or rebar from China and Malaysia and rebar subsidisation from China, according to a note in the government's New Zealand Gazette. Commerce Minister Jacqui Dean signed off on the investigations on Aug. 15, a week before the parliament was dissolved for the general election, and the public notice was issued on Aug. 24.

"This initiation follows the receipt of an application made by the New Zealand industry providing sufficient evidence justifying the need for investigations," Peter Crabtree, general manager of science, innovation and international for MBIE, said in the note. Dumping essentially involves a situation where the export price of goods imported into New Zealand or intended to be imported into New Zealand is less than the normal value of the goods.

Chinese steel imports have been a bone of contention around the world as US and European producers claimed their own industries were being undercut by the dumping of subsidised steel in their markets.

The application was submitted by Pacific Steel, the sole producer of rebar in New Zealand. Pacific Steel is a wholly owned subsidiary of New Zealand Steel Holdings whose parent company is ASX-listed BlueScope Steel.

NZ Steel filed a similar complaint with MBIE last year claiming imports of Chinese steel coil were subsidised by the government of China and caused material injury to the New Zealand industry. MBIE's final report into that complaint found Chinese imports were undercutting NZ Steel prices, but that it couldn't be blamed on government support for Chinese manufacturers, which was minimal at most. Last July, Minister Dean accepted the that they're too small to have injured the domestic industry.

At the time, E tū industry coordinator Joe Gallagher said there were serious questions about the rigour of the research underpinning the report, while NZ Steel "strongly disagreed" with the findings and said the ministry wrongly overlooked compelling evidence, placed too much weight on irrelevant evidence, and focused too much on finding incontrovertible evidence of the subsidies.

BlueScope also cited anti-dumping and trade relations as a "key public policy matter" at its latest annual general meeting.

In the latest case, MBIE said it was satisfied the complainant had provided enough evidence to open the two latest investigations.

"Sufficient evidence has been provided that rebar from China and Malaysia is being dumped, and sufficient evidence has been provided to show that material injury to the New Zealand industry is being caused by dumped goods imported from China and Malaysia," MBIE said. The same was true for the subsidisation claim.

The investigations must be completed within 180 days and should be wrapped up around March 3. After its investigation, MBIE will make a recommendation to the Minister of Commerce and Consumer Affairs who then makes a final determination on the investigation, including whether to impose duties.

In order to impose anti-dumping duties, "the investigation will need to establish to a higher standard of proof that dumped imports are causing material injury," MBIE said in the two latest reports.

Among other things, Pacific Steel argues its prices are being undercut which causes price suppression and price depression and the "evidence shows clearly that dumped goods are having injurious effects on the local market" and it is experiencing an adverse impact on sales, profits, return on investment and cash flow.

(BusinessDesk)

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