Chinese products made up more than half of South Korea's steel imports in the first seven months of this year as domestic demand for them rose on cheaper prices and better quality, a government report showed Wednesday.
In a report to the National Assembly, the Ministry of Commerce, Industry and Energy said 8.32 million tons of steel products were imported from China in the January-July period, accounting for about 53 percent of the country's total steel imports.
The ministry said better quality control and cheaper prices are fueling domestic demand for Chinese products that are now competing with local ones in more value-added areas. "This is a change from the past, when Chinese steel made inroads into areas where local mills were unable to meet demand," the report said.
South Korea maintained a trade surplus in the steel sector until 2005, but posted a deficit of US$1.49 billion in 2006. The figure rose to $2.93 billion by the end of July, as domestic demand for cheap steel products climbed.
China is South Korea's No. 1 trading partner with two-way commerce hitting US$64.94 billion in the first half of this year. The figure has been expanding by an average of about 28 percent every year since 2000.
To deal with the influx, the ministry said it set up an online reporting system to accurately track Chinese steel imports and prices so the data can be used for reference in future trade negotiations.
The ministry is also moving with lawmakers to introduce legislation that will make it mandatory for Chinese steel products to meet South Korean industrial standards, in an effort to prevent the import of cheap sub-standard products.