Inquiry launched into Asian steel dumping; OneSteel, BlueScope could be granted subsidies

An inquiry has been launched into Chinese and other Asian steelmakers for suspected dumping and subsidisation of “certain hollow structural” steel products, following a complaint from local steelmaker OneSteel, according to AFP.

Australia’s second-largest steel company OneSteel last month retrenched 400 workers at its manufacturing and distribution centres, following sustained pressure from the high Australian dollar and cheap overseas steel imports.

BlueScope Steel, Australia’s biggest steelmaker, followed suit, cutting 1,000 jobs and closing its export business.

The Australian Customs’ inquiry – involving steel companies from China, South Korea, Malaysia, Taiwan and Thailand – will hopefully provide a lifeline for Australia’s steelmakers, with the government likely to pay subsidies to local companies if the imports are confirmed ‘dumped’.

"The application alleges that the goods have been exported to Australia at prices less than their normal value and that, in the case of China, countervailable subsidies have been received in respect of the goods," AFP quoted Customs.

"The application claims that the dumped and subsidised exports have caused material injury to the Australian industry."

Customs delegates will reportedly look at imports between July 2010 and June 30 2011 for proof of OneSteel’s complaint, and look back as far as July 2007 to find proof that the local steelmaking industry was injured as a result of the imports. 

Customs said the government could be required to provide subsidies to Australia’s steelmakers if the matters pertaining to the complaint are proven; the inquiry is scheduled to report back by February next year.

Australia’s steel sector is clearly in dire straits, with the government proposing a $300 million fund as part of the carbon price package earlier this month to help Australian steel companies recover; the steel plan has not yet received backing from the opposition or the greens, though.

The government also appointed a manufacturing envoy to help the troubled industry secure more contracts from major companies such as BHP Billiton, Rio Tinto and Woodside Petroleum.

According to the AFP report, these companies all favour Chinese products over locally-made supplies, no doubt because of their extremely competitive pricing.

Image: AFP

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