Trade cases, measures and quotas: Steel trade is becoming impossible
The number of trade cases and tax measures in the global steel market has increased significantly since 2012. There were always trade cases; however, after 2012 the US started to launch antidumping duty investigations against almost every product and the rest of the world followed suit without delay. Since 2012, the US has frequently been accused of initiating unjustified antidumping duty investigations, but this has not stopped other countries from launching new antidumping duty investigations in their turn. Additionally, some countries have revised antidumping and custom duty rates and some have started to impose import quotas, resulting in a depressed outlook for the global steel trade.
Buyers around the world have been forced to change their long-standing supply sources due to these trade cases and new quota applications, while drastic changes have been seen in certain countries. For example, India increased its iron ore export tax to 20 percent in 2011, raising it to 30 percent in 2012 and the country’s iron ore exports declined. Taking advantage of this, Australia accelerated its ongoing iron ore investments and also started new projects. However, coupled with the slowdown in the Chinese steel consumption, eagerness to increase capacity in the global iron ore market caused iron ore prices to plummet.
Until the registration of overseas rebar suppliers at Egypt’s General Authority of Export and Import Control came into effect, Egyptian buyers significantly increased their import purchases and at the same time domestic producers went through a difficult time. When the registration of overseas suppliers came into effect, inventories in Egypt were quite high, resulting in very limited purchases by Egyptian buyers for several months. Meanwhile, some overseas suppliers were approved for registration and in the end all this trouble did not ensure any benefit for domestic mills.
In India, the minimum import price caused a debate on whether Indian product exports might be subject to antidumping duty investigations.
Now, everybody is watching the antidumping duty investigations launched by the EU against flat rolled steel products. In fact, these investigations are good news for Turkey because the only HRC source left to EU buyers is Turkey. However, the EU’s antidumping duty investigation against HRC imports from Russia and Ukraine following its investigation against China has caused CIS-based suppliers to enter the Asian market which receives 71 percent of Chinese exports, and this will result in fierce competition. So should we not be worried about this competition intensifying in Asia? Considering Turkey is an open market, it is hard not to expect to see repercussions in the Turkish market from this competition. Buyers across the world are right to choose the most competitive price, so what if offers to Asia drop below our offers from the same regions?
Moreover, Turkey is competing in global markets for every industry segment which uses steel as raw material. Let us say it launches an investigation and starts imposing an antidumping duty, and as a result domestic and import HRC prices increase. Would this not reduce our ability to compete in the global market with an Asian machinery or pipe manufacturer?
Trade measures and quotas – which have occupied a very significant place in our industry since global steel prices started to decline – have resulted in temporary improvements; however, they also make our daily lives difficult. The daily workflow in the industry is becoming busier because more paperwork has to be dealt with and attention needs to be paid to little details to avoid any possible accusations. While trade measures have been taken to protect the steel markets, global steel prices have started to indicate significant declines. As for Turkey, it is becoming more dangerous for it to leave its own market vulnerable, while other countries in the rest of the world are trying to protect their markets. However, it is obvious that a very meticulous examination is required in Turkey before any steps are taken towards implementation of trade measures as regards steel which constitutes a vital raw material for many of the country’s industry segments.
After all, the steel trade, which was difficult enough ten years ago, is now becoming impossible.