NZ Steel lodges third complaint on steel imports

NZ Steel is continuing its campaign to gain more protection from steel imports, lodging its third complaint that dumped Chinese and Malaysian products are undercutting local manufacturers.

The Ministry of Business has begun two new separate investigations into allegations of subsidies on certain hollow steel products from China and that claimed dumping of Chinese and Malaysian imports are causing “material injury to the New Zealand industry.”

The Australian-owned NZ Steel is once again seeking the imposition of provisional countervailing duties.

MBIE general manager science Peter Crabtree signed off on the investigations this week despite the ministry finding only in December last year it had no grounds to improve provisional measures to protect steel product makers.

In August MBIE launched an investigation(still going) into steel reinforcing bar and coil (rebar) from China after Pacific Steel NZ (a NZ Steel subsidiary) claimed Chinese government-subsidised rebar imports were causing it material injury through price undercutting, price depression and price suppression.

While filing the complaint, Pacific Steel had also asked for provisional measures to be imposed on the imports during the remaining period of the investigation but that was turned down by the ministry. NZ Steel has also sought a judicial review of the previous commerce and consumer affairs minister’s decision not to take action over the alleged steel dumping of galvanised steel coil. A decision is not yet out on a procedural hearing in the Wellington High Court in December though its understood a substantive hearing has been set for May.

Chinese steel imports have been a bone of contention worldwide as US and European producers claimed their own industries were being undercut by the dumping of subsidised steel in their markets. In early March US president Donald Trump sparked fears of a global trade war after imposing global tariffs of 25% on steel and 10% on aluminium though that was more about his desire to build up the local US steel industry than concern over dumping.

According to notices published on the New Zealand government’s gazette, MBIE has agreed there is enough evidence supplied by NZ Steel in its December application to justify both investigations.

MBIE’s analysis of the information supplied by NZ Steel covering the past seven financial years found there has been a significant increase in the volume of hollow steel products from China. While the ministry said there was evidence NZ Steel has experienced a decline in sales volume and revenue, it also noted there had been no significant decline in market share that could be attributed to the alleged subsidised imports from China.

The ministry also said it was satisfied NZ Steel had supplied enough evidence of dumping by Chinese and Malaysian HSS producers, based on import statistics for the export price. NZ Steel estimates the margin of dumping to average 32% for Chinese products and 36% for Malaysian products.

Again the ministry notes there has been no significant decline in market share that can be attributed to the alleged dumped imports and NZ Steel doesn’t consider it has suffered impaired productivity or utilisation of production capacity.

NZ Steel’s application pointed to the Australian government’s Anti-Dumping Commission recently having concluded several investigations concerning steel goods from China and Malaysia. The Australian commission has imposed anti-dumping duties and countervailing duties as a result of its findings and NZ Steel says their imposition is likely to have a diversionary effect on imports into New Zealand which is nearby and uses similar product types.

Anecdotally, the steel company says import offers of like products into New Zealand has increased since the Australians imposed anti-dumping duties.

The latest applications have been supported by Kiwi-owned Industrial Tube Manufacturing and NZ Tube Mills, owned by Amari Metals. The three firms collectively account for a big proportion of New Zealand’s production of these goods.

NZ Steel reported an $A100m turnaround in underlying operating earnings in the year to June 30, 2017, to $A61.1m, compared with a $A40.3m loss the previous year. That followed two years of cost-cutting, the sale of its Taharoa ironsands business, and a focus on domestic over export sales.