Imports of Chinese steel grow 80%

Imports of Chinese steel products during the first four months of this year soared more than 80 percent compared to the same period a year earlier, said a research institute for Korea’s top steel producer, Posco.
The rise from China lifted the total amount of steel imports by 38.4 percent over the four-month year-on-year period, the Posco Research Institute said. Thirteen Korean companies stopped making steel pipes last year amid the growth in imports.
Out of the 8.9 million tons of steel imported from January to April of this year, Chinese products accounted for 4.8 million tons, up 83 percent from the same period last year. Imports of Chinese-made sheet metal, in particular, jumped 95 percent year-on-year, while steel billet imports rose by 52 percent.
“The rapid rise of made-in-China steel products is attributable to a temporarily overflowing supply before the Chinese government’s plan to cut tax rebates on steel products is exercised,” said Choi Dong-yong, a researcher from the institute. “China has also strategically diverted steel exports to Korea from the United States and the European Union as the two huge trade partners have recently moved to step up trade pressure on China.”
However, Choi said, a structural problem is a bigger factor behind the increasing volume of inbound Chinese steel products. Although Korea has a sufficient supply of iron rods and steel pipes, their lower price competitiveness compared with Chinese companies has caused Korean firms to turn increasingly to imports.
The local market is currently experiencing a shortage of high-priced steel plates and hot-rolled steel, and so companies have increasingly relied on imports. Annual imports have risen about 100 percent in recent years. China’s dominance was particularly intense in steel wire rods, accounting for 40 percent of the Korean market.
Indirect imports of Chinese steel products are on the rise, too, said the institute. Over the past three years, imports of general machinery, assembled metal components including bolts and nuts and transportation machines from China have soared by more than 50 percent, dwarfing imports from other nations. Choi said the shrinking quality gap between Korean and Chinese goods and the sharp appreciation of the Korean won have also contributed.

By Seo Ji-eun Staff Writer [spring@joongang.co.kr]