Impact of tariffs on Chinese steel debated

Analysts are divided on what will happen to steel prices in the US after the US Commerce Department applied duties of more than 500 percent on imported cold-rolled flat steel from Chinese steelmakers.

China's Ministry of Commerce said Wednesday that China was "strongly dissatisfied" with the ruling and criticized the US for adopting unfair methods in its anti-dumping and anti-subsidy probes into Chinese products. China is taking action under the World Trade Organization dispute settlement framework, the ministry said on its website.

The US Commerce Department levied the tariff on Tuesday, accusing Chinese companies of selling their products below market prices. It also put a duty of 71 percent on the same steel made in Japan.

"It's used for auto bodies and appliances. It's flat and looks strong," John Anton, director of steel analytics at the data company IHS in Washington, said about cold-rolled flat steel in an interview. "The people who will love this decision are steel makers and those who hate it will probably be steel buyers."

The US Commerce Department ruling comes as tensions mount between Beijing and Washington over a slumping global steel market that has been under pressure since the sharp fall in oil prices nearly two years ago trimmed steel demand in energy-related projects. European and US steel producers said China is distorting the global market and undercutting them by dumping its excess supply abroad. They also believe that China unfairly subsidizes its domestic industry.

China's Ministry of Commerce said the US has adopted unfair practices during anti-dumping and anti-subsidies investigations on Chinese products, which severely harmed the rights of Chinese enterprises to formally defend themselves.

The ministry said that because the US refused to levy separate rates on Chinese State-owned enterprises, the companies were forced to give up on their response to the probe, which has resulted in high punitive taxes on steel products from China.

China urged the US to follow the WTO rules and correct its wrongdoings.

China blames a softening world economy for the current state of the steel market. In February, China set a goal of reducing steel production capacity by 100 million to 150 million tons in five years.

Charles Bradford, an industry analyst with Bradford Research Inc in New York, said that Chinese exports of cold-rolled flat steel to the US have been declining since last fall. "Last September the US imported 51,000 metric tons and in October it fell to 5,700 metric tons," he said. "In April the imports totaled 52 tons so the tonnage involved here is almost meaningless now."

Bradford said steel prices in China surged in February but began sliding earlier this month. "There was a big decline on May 6 and that has started to filter through to the rest of the world," he added.

paulwelitzkin@chinadailyusa.com

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