SeAH Files Anti-Dumping Petition Against Chinese Special Steel, Expands Defense to Strategic Materials (Comprehensive)

SeAH Besteel and SeAH Changwon Special Steel have filed a request with the government for an anti-dumping investigation into Chinese-made special steel bar products. The industry views this as a move to defend not only general steel products but also strategic materials. Special steel bar products are high value-added materials used in industries that require high reliability, such as automotive, aerospace, nuclear power, and defense. They are classified as special steel, distinct from general hot-rolled or thick steel plates.

On August 4, SeAH Besteel and SeAH Changwon Special Steel announced that the indiscriminate influx of Chinese special steel bar products is posing a serious threat to the domestic industry. They stated that, in order to protect the industry and secure material sovereignty, they have requested an anti-dumping investigation from the Trade Commission of the Ministry of Trade, Industry and Energy. This is virtually the first time SeAH has filed a petition concerning special steel bar products. SeAH Besteel shares the domestic special steel bar market with Hyundai Steel. As SeAH focuses on high value-added special steel, it is a direct stakeholder in this petition.

Special steel wire rod. Asia Economy DB

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This decision marks the third anti-dumping petition in the steel industry over the past year, following cases involving thick steel plates and hot-rolled steel sheets. Previously, Hyundai Steel filed anti-dumping petitions against Chinese thick steel plates and Japanese and Chinese hot-rolled steel sheets. In February, the Trade Commission recommended a provisional tariff of up to 38.02% on Chinese thick steel plates, and last month, it recommended a tariff of up to 33.57% on Japanese and Chinese hot-rolled steel sheets to the Ministry of Economy and Finance.

The decision to file an anti-dumping petition against Chinese special steel bar products stems from growing concerns that even the domestic precision materials sector could be encroached upon. Although special steel bar products account for only 5% of the total steel market, domestic demand was estimated at 2.94 million tons last year. However, due to their high strength and lightweight properties, they are widely used across strategic industries such as automotive, heavy machinery, defense, aerospace, and nuclear power. They are especially used in components that require precise specifications such as heat resistance, pressure resistance, and durability. Recently, however, there have been concerns that the rapid market penetration of low-priced Chinese products could destabilize the foundation of the domestic parts and equipment industry.

According to the Korea Iron & Steel Association, domestic imports of special steel bar products reached 750,000 tons last year. Of this, 670,000 tons, or 92%, were from China. Imports of Chinese products, which stood at 450,000 tons in 2022, increased by about 50% over two years, while the import price per ton fell by 24%, intensifying price distortions.

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Domestic steelmakers producing special steel bar products have also suffered direct blows to their performance. SeAH Changwon Special Steel's operating profit plummeted by 91%, from 125.7 billion won in 2022 to 11.4 billion won last year. The industry analyzes that the influx of low-priced Chinese products has driven down market prices, ultimately leading to reduced profitability.

Another background to this anti-dumping petition is concern over quality risks. The quality of special steel bar products is difficult to distinguish by appearance, so most problems only become apparent after use. This is particularly critical in fields that require high reliability, such as automotive, nuclear power, and aerospace, where the traceability and quality assurance of procurement materials are essential. Chinese products are reportedly sometimes filtered out on-site for failing to meet these standards. An industry official said, "There are many cases where Chinese materials are judged unsuitable during the testing process."

SeAH emphasizes that this petition is not simply an import-export dispute, but a defensive measure to protect the foundation of strategic industries. A representative from SeAH Besteel Holdings stated, "Recently, major countries such as the United States, Europe, and India have been strengthening anti-dumping measures against Chinese special steel bar products, so it is expected that the volume of these products entering Korea will increase further." He added, "By implementing minimum protective measures for the special steel bar industry, which is a core material for national strategic industries such as defense, space, and aerospace, we must secure material sovereignty and protect the fundamental competitiveness of Korea's materials, parts, and equipment industry."

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