On Monday, China launched its own anti-dumping probe into imported stainless steel worth $1.3 billion that includes the metal from a Chinese mill that is privately owned with offshore operations, after complaints were filed that a large amount of the product has been damaging to the local industry.
On Monday, the country’s Commerce Ministry announced that the investigations would target hot-rolled stainless steel plate and steel and stainless steel billet imports from Japan, Indonesia, South Korea and the European Union.
This move followed a complaint from Shanxi Taigang Stainless Steel, with backing from another four state-owned mills that included the stainless steel division of Baosteel, which blames inexpensive imports on dropping prices.
China makes as well as consumes close to half the stainless steel in the world, which is used in transportation, packaging and buildings to protect against corrosion.
While this complaint targets eight producers that are foreign, it includes a lists several Chinese companies, including the unit in Indonesia of Tsingshan Stainless Steel, one of the top producers in the world and 19 traders importing the product.
Some private companies in China have started or opened new plants recently in Indonesia, drawing on that country’s plentiful resources of nickel and lower production costs. Analysts said that a substantial portion of that new production is being imported to China.
The rapid rise in imports has damaged the market in China according to a complaint that Shanxi Taigang filed and released with the document from the commerce ministry.
Nearly two-thirds of China’s stainless steel imports in 2017 were from Indonesia, which was up by 5% from 2016 zero during 2015, said the complaint. That increased to close to 86% during the first three months of 2018, according to the complaint.
Prices of imported stainless steel fell 23% in 2017 to $1,866 per ton from the 2016 price of $2,435 per ton.
If the products are allowed to continue to enter China with low prices and take more share of the market, sales of domestic products will continue to fall, said the complaint.
An analyst in Beijing said that the investigation was driven completely by a dispute in the industry between state-owned enterprises or SOEs and the rapidly growing private mills.
The analyst added that due to cheap costs of productions, it is more competitive that products in China.