POSCO, Dongkuk lukewarm on Hyundai's stand against Chinese rivals

Thick steel plates are piled up at Hyundai Steel's Dangjin plant in South Chungcheong Province in this undated photo. Courtesy of Hyundai Steel

POSCO and Dongkuk Steel have remained cautious about joining Hyundai Steel in filing anti-dumping complaints with the government against the import of low-priced thick steel plates from China, according to industry officials, Thursday.

The only three Korean producers of thick steel plates are divided over curbing the sale of products from China, due to their different stances on Beijing’s possible economic retaliation against their trading with Chinese partners.

Amid the deteriorating profitability caused mainly by the oversupply of Chinese products, Hyundai Steel recently filed an anti-dumping complaint with the Ministry of Trade, Industry and Energy, claiming that the import of low-priced thick steel plates from China has hurt its business.

Thick steel plates, which refer to steel plates over 6 millimeters in thicknesses, are used mainly in shipbuilding and construction. Chinese steelmakers have been dumping thick steel plates and other products in the wake of a construction industry slowdown there.

According to the Korea International Trade Association, China’s export of steel products during the first four months of this year rose 15.1 percent year-on-year, while the export price fell 19.4 percent.

In particular, data compiled by the Korea Iron & Steel Association showed that the volume of Korea’s imports of thick steel plates from China reached 1.12 million tons last year, up 73 percent year-on-year. The import volume also amounted to 688,000 tons during the first half of this year, a 12 percent increase from a year earlier.

POSCO, however, distanced itself from Hyundai Steel, saying that the Hyundai Motor Group subsidiary acted alone in filing the anti-dumping complaint.

“If the government asks us to give an opinion about this issue, we will answer in accordance with our strategies and situations,” a POSCO Holdings official said during a conference call on second-quarter earnings.

POSCO has more operations and sales volume in China than Hyundai Steel, which has focused more on exports to the U.S. and other countries.

“If China retaliates, POSCO will suffer more than Hyundai Steel,” a steelmaking industry insider said.

Dongkuk Steel said it remains neutral about the anti-dumping complaint. The company’s business is also closely related to China, as it produces cold-rolled steel by processing both Korean and Chinese hot-rolled steel to cut costs.

Under the current law, the government cannot launch an investigation into an alleged case of dumping, if POSCO and Dongkuk Steel disagree with the complaint filed by Hyundai Steel.