20 April 2016

Japan and South Korea reduce prices for products abroad

The US and Europe continue to actively accuse the PRC of supplying cheap steel. In their opinion, China is flooding the markets with goods with an excessively low cost . At the same time, Japanese and South Korean products are completely out of the sight of critics. But in fact, both South Korea and Japan are equally active in reducing the cost of steel, wishing to maintain market positions. This underestimation of exporters' activities only emphasizes the pressure affecting the steel sector.

Analysts interviewed by Reuters gave their assessment of the situation. The cost of Japanese and South Korean products abroad is very different from the value on the domestic market. The difference in prices is at least a third. At the same time, representatives of manufacturing companies do not want to comment on pricing. However, they explain their position on cost reduction quite intelligibly. This step is necessary to ensure competitiveness relative to Chinese suppliers.

For a good example, Reuters considered an I-beam. In Japan, similar products are sold at a price of about 630 USD / ton. Export deliveries go at a price of 470 USD / ton. Now about the hot-rolled steel sheet. Its cost in South Korea is from 581 USD / ton. The price of export supplies is about 522 USD / ton. South Korean and Japanese manufacturers export over 40% of the produced steel abroad. Most of the goods are shipped to Asian countries. In 2015, the countries in aggregate exported 75 million tons of steel. At the same time, Chinese supplies amounted to 112 million tons.

However, the PRC does not hesitate to strike back. In early April, the next anti-dumping duties were introduced. They touched on the electrical steel supplied by Japan, South Korea and the EU. The import duty will be about 46.3% for these countries. Among the companies that came under the sanctions of the People's Republic of China JFE Steel Corp, POSCO, Sumitomo Metal Corp. European manufacturers did not mention the sanctions. Despite the economic downturn, China continues to be the leading steel producer. At the same time, exports to China from other countries are relatively small. This rule applies to electrical steel. It is used to produce generators, power transformers.

The appointment of new fees can be regarded as a response. The Chinese Association CISA has sounded information on the situation with anti-dumping duties. In 2015, 36 investigations were initiated against the producers of the People's Republic of China.

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