NZ Steel sues government over Chinese import decision

Union said there were "serious questions" over the rigour of ministry investigation into steel. 

NZ Steel is suing the government over the previous Commerce and Consumer Affairs Minister’s decision not to take action over Chinese steel dumping.

In July, then Commerce Minister Jacqui Dean said she would not impose countervailing duties on imports of galvanised steel coil from China.

A Ministry of Business investigation found Chinese imports of steel were subsidised at very low levels, no more than 0.08%, a spokesperson said.

However, the report was heavily criticised by E tū at the time of its release, with the union saying it was “extremely disappointed" with the decision. It claimed there were serious questions about the rigour of the research given only one Chinese manufacturer responded to questions from the New Zealand government.

This September NZ Steel lodged an application for judicial review of the former minister’s decision.

A hearing began this morning in the High Court at Wellington before Justice Susan Thomas, with Jack Hodder, QC, representing NZ Steel, which is owned by ASX-listed BlueScope. James Every-Palmer, QC, is representing the government.

MBIE and new Commerce Minister Kris Faafoi wouldn't comment further on the case. NZ Steel says in a statement while it will not comment on specifics, "it recognises the importance of countries operating within the WTO framework and is committed to free but fair trade."

The ministry is taking a look at different claims over Chinese steel imports, with former minister Ms Dean having signed off on another investigation in August just before Parliament was dissolved for the general election.

That investigation, which is still going, concerns the reinforcing steel bar and coil or rebar from China and Malaysia.

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.

Australian-owned New Zealand Steel achieved a $A100 million turnaround in underlying operating earnings in the year to June 30, following two years of deep cost-cutting, the sale of its Taharoa ironsands business, and a focus on domestic over export sales.

Underlying earnings before interest and tax came in at $A61.1 million for the year, compared with a $A40.3 million loss in the 2016 financial year, despite a fall in total steel despatched from 697,100 tonnes the previous year to 604,900 tonnes in the latest year and sales revenue of $A747.5 million well below the $A887.3 million recorded in the previous year.

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