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Wednesday, January 14, 2004

Now China Joins The Game

Can anybody seriously be surprised by this after the lamentable performance of the Bush administration in this area.

Mainland Chinese steel companies received a boost on Wednesday after China imposed anti-dumping tariffs on imports of cold-rolled steel from Russia, South Korea, Ukraine, Kazakhstan and Taiwan.

The Commerce Ministry said the tariffs - ranging between 3 per cent and 55 per cent - would become effective immediately. "Dumping of such products does exist, and has caused substantial damage" to China’s domestic steel producers, the ministry said.

The tariffs, which would vary for each foreign steel producer China deemed was selling cold-rolled steel at below-market prices, would last for five years retroactive to September 23 of last year. The decision to impose the tariffs was originally made on that date, but was not enacted because of what the ministry only explained as “a special situation.” China will begin levying the tariffs on Wednesday.

Class A shares of Baoshan Iron and Steel, China’s top steelmaker, rose 0.26 percent to Rmb7.79, outperforming the benchmark Shanghai composite index, which dropped 0.94 per cent to 1,597.48 by midday on Wednesday. Shares of Angang New Steel, whose shares trade in Hong Kong jumped 5.77 per cent to HK$4.125.

Government reaction from China’s Asian trading partners was muted. South Korea was unfazed by China's decision because the move exempted Posco, Korea's top steelmaker. Posco was excluded from the tariffs because the price at which it exported cold-rolled steel was not more expensive than how much it sold the steel domestically. Three South Korean steelmakers - Union Steel Manufacturing, Hyundai Hysco and Dongbu Steel - would be subjected to the tariffs.

In Taiwan, government officials said the tariffs would not have a substantial impact on the country’s steelmakers since the majority of their exports to China were re-exported and exempt from the tax. Imports from China Steel, the country’s largest steelmaker, will be subject to a 24 per cent tariff, while its subsidiary Yieh Loong Enterprise will be taxed at 8 per cent. Tariffs for Kao Hsiung Chang Iron and Steel Corp, the largest exporter of cold-rolled steel to China, will be 14 per cent.
Source: Financial Times

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