How the Steel Pipe Industry Copes with Anti-Dumping Duties

Recently, the European Union appealed to the World Trade Organization that China imposed anti-dumping duties on its high-performance stainless steel seamless pipes and filed a consultation request under the WTO dispute settlement mechanism. Although China-Europe seamless steel pipe disputes have long existed, this time the “hand in hand” was at a time when China-Europe PV disputes were in a stalemate. The trend of the cases has attracted considerable attention from the industry and may become the trigger for the further escalation of China-EU trade friction.

Anti-Ge strikes the Sino-European seamless steel pipe trade friction started two years ago. On September 8, 2011, according to the anti-dumping application submitted by the relevant domestic steel pipe enterprises, the Ministry of Commerce decided to conduct an anti-dumping investigation against high-performance stainless steel seamless pipes originally produced in the European Union and Japan.

On May 8, 2012, the Ministry of Commerce preliminary ruled that the EU and Japan had dumping behaviors on China's export-related stainless steel seamless pipes. On November 8 of that year, the final decision of the Ministry of Commerce concluded that there was indeed dumping of stainless steel seamless pipes imported from the European Union and Japan, and that Chinese domestic related industries were substantially damaged, and began to impose anti-dumping measures ranging from 9.2% to 14.4% on the following day. Taxes are implemented for a period of 5 years. Among them, the applicable tax rate for Spanish companies is 9.7%, and the applicable tax rate for German companies and other EU companies is 11.1%.

Subsequently, Japan took the lead in filing a complaint application to the WTO on this case, and the expert group under the WTO dispute settlement mechanism was formally established on May 24 this year.

Today, the EU has followed the footsteps of Japan and formally filed a complaint. The European Commission believes that China's anti-dumping tariffs imposed on seamless steel tubes are inconsistent with WTO rules in terms of procedures and substantive reasons. According to the dispute settlement mechanism of the WTO, if the consultation between the EU and China fails, the EU can request the WTO to establish a panel of experts to adjudicate disputes after 60 days.

After the European Union decided to appeal, the person in charge of the Treaty and Law Division of the Ministry of Commerce stated in the first time that the Chinese side had received a request for consultation from the EU and would properly handle it in accordance with the rules of the WTO Dispute Settlement Mechanism.

Reasonable self-defense Since the end of last year when China made the anti-dumping final ruling, the EU has suddenly decided to appeal, associating with the recent warming of the China-European Photovoltaic dispute. The European Union has quite determined that China’s anti-dumping investigation is a countermeasure against photovoltaics. Measures to counterattack suspects. However, the reporter learned that China's anti-dumping against stainless steel seamless pipes in Europe is not a trade revenge, but it is a legitimate industry self-defense.

In recent years, most of the stainless steel seamless pipes imported from the EU in China belong to special steel pipes, which have higher performance and higher cost and price than ordinary steel. They are used in petroleum and natural gas pipelines, supercritical and ultra-supercritical power station boilers, etc. Seamless pipe imports amounted to about 40,000 tons, with an average price of around 10,000 U.S. dollars.

However, as the technical level of domestic high-performance seamless steel pipe products has been significantly improved, EU export-related companies have been dumping stainless steel seamless pipe products to the Chinese market in order to maintain their existing share in China and frequently resort to substantial price cuts. Industrial development has caused substantial damage.

“In the face of pressure from domestic related products in China, the price of the European Union's stainless steel seamless pipe products exported to China has been reduced from the previous 300,000 yuan/ton to 100,000 yuan/ton or less.” Zhejiang Jiuli Special Material Technology Co., Ltd. Zheng Jieying, general manager, said that at present, the company has completed the localization of most of the high-performance seamless pipes, but due to the low-cost sales of EU-related products in the domestic market, the company’s high-end product market has faced greater impact and was forced to further Lower the price.

Hu Yanping, an analyst at Union Steel, told reporters that in addition to the Jiuli special materials, some private stainless steel enterprises in Jiangsu and Zhejiang provinces such as Wujin and Qingshan also have stainless steel seamless pipes, and their total monthly production is close to 10,000 tons.

It seems that China's anti-dumping duties on the European Union seamless steel pipe is not a trade retaliation, but rather a legitimate protection of the domestic steel industry. It is a reasonable and self-defensive means. What's more, under the backdrop of the entire steel industry downturn, China's seamless steel pipe industry is also suffering from high output, high inventory and low efficiency. According to statistics, in April, the loss of seamless steel pipe enterprises has reached 40%, the profit rate is only 0.05%, while the market price has approached the level of the financial crisis, the lowest point in the past five years.

"The domestic seamless steel pipe industry is already overcapacity. If the European and Japanese steel pipe products are dumped at a relatively low price in China, it will be tantamount to worse for the steel pipe industry." An industry source told reporters that the state of the seamless steel pipe The anti-dumping investigation not only aims to protect the current relatively fragile domestic steel pipe industry, but also reflects the change in China's attitude toward international trade disputes. It has changed from a passive attack in the past to a proactive one.

Two-handed preparation In recent years, China and the European Union have constantly been in the steel field, but almost every time the EU is the first to launch a disaster, and steel pipe products are frequently "invited."

As early as 2010, the European Union launched an anti-dumping investigation on stainless steel seamless pipe products in China, and finally decided to impose anti-dumping duties ranging from 48.3% to 71.9%. In February of this year, the European Union conducted an anti-dumping investigation against seamless steel tubes with an outer diameter exceeding 406.4 mm. According to my steel network survey, last year China exported a total of 16,500 tons of related products to the EU, amounting to nearly US$20 million.

According to industry insiders, the European Union has successively resorted to the banner of trade protectionism and is not unrelated to the recently announced steel industry revitalization plan. In order to revive the sluggish steel industry, the European Commission put forward for the first time in 36 years an action plan to revive the steel industry. Relevant data show that the iron and steel industry has provided 360,000 jobs for the EU, with annual sales of 170 billion euros, and annual output of 177 million tons, accounting for 11% of world production.

However, under the influence of the European debt crisis, due to the drastic reduction in downstream demand for automobiles and real estate, the European Union’s steel industry has entered a quagmire. Compared with the peak in 2007, European steel demand has dropped by nearly 30%. Last year, the EU’s steel production capacity surplus reached 25%.

Compared with the European Union’s continuous provocations, anti-dumping against stainless steel seamless pipes in Europe is the first anti-dumping investigation on foreign steel products since 2011. Experts in the industry pointed out that taking the initiative to “fight” indicates that after the baptism of white-hot international competition, China’s awareness of actively protecting domestic industries has gradually increased, and it has been able to use world trade rules more rationally and skillfully to safeguard the vital interests of domestic industries and enterprises. As a world trading power, China is no longer "compromising and seeking perfection" as it used to.

Mei Xinyu, a researcher at the Institute of International Trade and Economic Cooperation of the Ministry of Commerce, believes that China, as a world trading power, fully possesses the ability to pay the price by cracking out the other party's password, and there are many countermeasures that can be used, but consultations and negotiations have always been treated by China. The consistent position of trade disputes.

Of course, if the consultation at the government level fails to reach an agreement, the domestic stainless steel seamless pipe industry must make early plans. Zheng Jieying suggested that in the face of the EU’s counterattack, domestic companies need to take care of themselves both internally and externally, internalize their internal skills, accelerate the research and development of high-end products, promote industrial upgrading, and “bring together” with other brother companies in the context of a serious excess of low-end products. “Overcoming difficulties; externally, we must actively explore promising emerging markets such as India, the Middle East, and Southeast Asia to achieve export diversification.