MBIE launches anti-dumping probe into Chinese steel imports

MBIE has launched an investigation into claims Chinese galvanised steel coil imports have been dumped on the local market, causing "material injury" to New Zealand industry, and the case will end up on the table of newly appointed Commerce Minister Jacqui Dean.

The investigation kicked off on Dec. 19 and was entered into the government's gazette yesterday. The MBIE initiation report shows New Zealand Steel, a subsidiary of ASX-listed Bluscope, filed a complaint in September, claiming " imports of Chinese steel coil are being subsidised by the Government of China (GOC) and have caused material injury to the New Zealand industry".

MBIE determined NZ Steel provided enough evidence that the Chinese coil was subsidised, using "information sourced from subsidy applications made by steel industries in other countries, and resulting subsidy investigations, which found that the GOC was subsiding Chinese steel producers to the detriment of their domestic producers".

The government department said it considers there's enough evidence that Chinese imports are undercutting NZ Steel, leading to lower prices for the company which meant it wasn't able to recover increasing costs, putting a squeeze on profit and investment.

MBIE couldn't find enough evidence that there had been a significant increase in the volume of imports relative to domestic production, or that NZ Steel's loss of market share could be solely attributed to the Chinese rival.

"On the totality of the information provided by NZ Steel, including information reasonably available to it, MBIE is satisfied that the company has provided sufficient evidence to warrant initiating an investigation," it said.

Chinese steel imports have been a bone of contention around the world, with world's most populous nation facing down Europe and US claims of dumping. When New Zealand was dragged into the matter in June, there were claims that Kiwi companies could face a backlash if the government pursued an anti-dumping probe.

The report said New Zealand officials have discussed the issue with their Chinese counterparts, who claimed the application didn't provide sufficient evidence to support the claims, and that it "recites and repeats old or irrelevant information; the injury information is feeble and has nothing to link any alleged lack of profitability to Chinese imports in distinction to general market conditions, the applicant's own costs, and the presence in the market of higher volumes of galvanised steel from other export sources".

MBIE's investigation must be completed within 180 days, excluding the holiday period, after which a recommendation will be made to the commerce minister, with Jacqui Dean making a final decision on whether to impose duties or not by July 9.

(BusinessDesk)