Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Chinese subsidies on steel imports not hitting NZ margins

Chinese subsidies on steel imports not hitting NZ Steel margins: MBIE

By Paul McBeth

July 7 (BusinessDesk) - The Ministry of Business, Innovation and Employment says Chinese subsidies on galvanised steel coil imports are too small to have injured the domestic industry, dominated by Australian-owned New Zealand Steel, which cried foul about the Chinese government help last year.

The ministry's June 9 essential facts and conclusions report found Chinese imports were undercutting NZ Steel prices, but couldn't be blamed on government support for Chinese manufacturers, which was minimal at most. Rising Chinese steel coil imports have moderated over the past two years and MBIE noted there hadn't been "a significant increase in the volume of imports of the subject goods in either absolute terms or relative to production or consumption in the domestic market."

NZ Steel, owned by ASX-listed BlueScope, filed a complaint with MBIE last year and mobilised a political campaign accusing Chinese government subsidies of causing material injury to the domestic industry.

In March, Commerce Minister Jacqui Dean wasn't convinced there were grounds for provisional measures to be imposed on Chinese imports and she is expected to make a final decision today.

"MBIE's overall conclusion, based on the subsidy levels established, is that while there is evidence of injury to the domestic industry attributable to the price effects of imports from China, material injury to an industry is not being caused by the subsidisation of imports from China," the report said.

NZ Steel's average selling price shrank 25 percent between September 2011 and June 2016 as the local company tried to match cheaper Chinese imports, which the company said was its strategy of trying to keep market share. While it lost market share between 2012 and 2014, it has since regained that ground, the report shows.

The company's earnings also showed steady and significant decline, which MBIE said "correlates significantly with and can be attributed to price undercutting, price depression and price suppression," but not linked to Chinese subsidies.

New Zealand importers who took part in the investigation were largely against imposing duties on Chinese steel imports, which would force them to lift their own prices and potentially push up the cost of construction.

MBIE started its investigation with little fanfare in December, simply noting it in the government's gazette without a public statement. Chinese steel imports have been a bone of contention around the world as US and European producers claimed their own industries were being undercut by dumping of subsidised steel in their markets. When New Zealand was dragged into the matter last year there were claims Kiwi firms could face a backlash if the government pursued an anti-dumping probe.

The ministry found it difficult to secure responses from Chinese manufacturers, with just one of seven responding to its questionnaire, while Chinese government officials said they could only provide general answers "due to the lack of cooperation with the investigation by such producers". Several intermediary exporters provided information, and MBIE also used on US, European and Australian investigations and World Trade Organisation documents.



© Scoop Media

Business Headlines | Sci-Tech Headlines


By May 2018: Wider, Earlier Microbead Ban

The sale and manufacture of wash-off products containing plastic microbeads will be banned in New Zealand earlier than previously expected, Associate Environment Minister Scott Simpson announced today. More>>


Snail-ier Mail: NZ Post To Ditch FastPost

New Zealand Post customers will see a change to how they can send priority mail from 1 January 2018. The FastPost service will no longer be available from this date. More>>


Property Institute: English Backs Of Debt To Income Plan

Property Institute of New Zealand Chief Executive Ashley Church is applauding today’s decision, by Prime Minister Bill English, to take Debt-to-income ratios off the table as a tool available to the Reserve Bank. More>>


Divesting: NZ Super Fund Shifts Passive Equities To Low-Carbon

The NZ$35 billion NZ Super Fund’s NZ$14 billion global passive equity portfolio, 40% of the overall Fund, is now low-carbon, the Guardians of New Zealand Superannuation announced today. More>>


Split Decision - Appeal Planned: EPA Allows Taranaki Bight Seabed Mine

The Decision-making Committee, appointed by the Board of the Environmental Protection Authority to decide a marine consent application by Trans-Tasman Resources Ltd, has granted consent, subject to conditions, for the company to mine iron sands off the South Taranaki Bight. More>>