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Steel industry calling for safeguard duties on imports

Released at: 10:23, 28/10/2016

Steel industry calling for safeguard duties on imports

Photo: Duc Anh/Illustration

Vietnam Steel Association petitions government to impose duties on imports of pre-painted galvanized steel.

by Minh Tuyet

The Vietnam Steel Association (VSA) has proposed the government impose temporary safeguard duties on imported pre-painted galvanized steel to protect local producers and workers.

Imports of pre-painted galvanized steel have increased dramatically, it said. In the first eight months of the year they stood at 386,000 tonnes, up 200 per cent. The market share of local producers is now just 53 per cent, 11 per cent lower than 12 months ago.

Any industry in a market where nearly half of all products are imported will not be able to develop, VSA said. The price of Chinese pre-painted galvanized steel is about VND6.7 million ($300) cheaper per ton than Vietnamese products, or 31 per cent, and Vietnamese products simply can’t compete.

Domestic manufacturers must also cope with a wide range of trade defense cases in foreign markets such as Malaysia, Thailand, the US, and Australia.

In documents sent to the government, VSA said it has been four months since the Ministry of Industry and Trade (MoIT) decided to investigate imported pre-painted galvanized steel and determine if safeguard duties were warranted. Delaying the investigation further is of great concern to the association.

On May 24 the Vietnam Competition Authority (VCA) received a proposal on safeguard methods for imported pre-painted galvanized steel from one law company and three domestic manufacturers. After considering the proposal, on June 6 it decided it had legal basis. On July 6 it issued Document No. 2847/QD-BCT on investigating the imported pre-painted galvanized steel.

The products to be investigated had the following HS codes: 7210.7010, 7210.7090, 7212.4010, 7212.4020, 7212.4090, 7225.9990, 7226.9919, and 7226.9999. The investigation was to determine the extent of damage incurred from January 1, 2013 to December 31, 2015.

According to Ordinance No. 20 on the dumping of imported goods into Vietnam, MoIT can decide to impose safeguard duties prior to completing an investigation if it finds that a delay to imposing such duties would cause irreparable damage to the domestic industry.

The domestic manufacturers lodging the May proposal said that in 2013 the importation of pre-painted galvanized steel reached almost 130,000 tonnes and then 240,000 tonnes in 2015, an increase of 84.5 per cent. Imports have originated from China, South Korea, Taiwan, and Thailand, but China accounts for over 80 per cent.

They suggested safeguard duties of 30 per cent and recommended they be imposed for four years.

MoIT announced in March that some imported steel billets and steel bars would be subject to safeguard duties of 22.3 per cent and 14.2 per cent, respectively. Its decision came from inspections conducted in December 2015 that revealed the imports had a negative impact on domestic steel production, in particular the production of steel billets and steel bars, due to their lower prices. If the situation continued domestic production would stagnate.

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