Duties on coated steel from China will help the development of national producers

The Interdepartmental Commission on International Trade (ICIT) in July 2023 completed an investigation against the import of coated carbon steel rolled products from China to Ukraine. The Commission decided to apply anti-dumping duties at the level of 30.7-48.14% from the customs value depending on the producer or trader for a period of five years.

The decision of the Commission dated 07/13/2023 enters into force 30 days from the date of publication of the message, although a complaint about the dumping prices of Chinese suppliers was received from the Ukrainian producer of rolled products with coating Module-Ukraine (in autumn 2021, Modul-Ukraine was acquired by Metipol) at the end of 2020. The outbreak of the war stalled this and other anti-dumping investigations for 1.5 years.

Market reaction

We welcome the decision of the ICIT to introduce anti-dumping measures against painted steel from China. As pioneers of this market, having launched its first production in 2010, we have always set the goal of creating a civilized market in which producers and importers could compete on an equal footing. During the war, when the market has almost doubled, this issue has become particularly acute, threatening a complete shutdown of both existing enterprises and the freezing of new projects.

The introduction of anti-dumping duties against painted steel producers from China is not something extraordinary – absolutely all countries neighboring Ukraine have long been protected by duties or quotas. The fact of dumping for export transactions of steel products from China has long been a proven fact, but only now, having managed to show the prospects for the development of the entire industry, we were able to convince the state of this and get its important support. A situation in which painted steel from China, even taking into account the non-refundable 13% VAT, is sold at the price of a hot-rolled coil in Europe or Turkiye simply cannot be in a normal market economy.

Poor quality from China

For the consumer, it is important that the amount of low-grade steel on the market will be reduced. Being in the lower price segment of the market, the only tool for the importer to fight for a client was the price. Under these conditions, the issue of quality was no longer raised, and almost all imports from China not only do not meet the DSTU, but even the initially declared low parameters. First of all, we are talking about the zinc content and the thickness of the steel. However, decorative properties, such as fading or peeling of paint after a short time after operation, undermined the confidence of the end user in steel products in general.

Market prospects

I am sure that alternative imports will appear in the painted steel segment in the near future, so there is no need to worry about a significant increase in prices. At the same time, Ukrainian producers got an excellent chance for development.

As we stated before the investigation began, our group already has a plan to expand production capacity. We also expect domestic competition to grow, as two more paint lines will be added to the three existing painting lines in the near future.

The presence of a strong domestic producer will also pull up related industries – producers of raw materials. We are talking about high-quality galvanized steel, and about chemistry – paints and varnishes. The latter are imported today, however, with the growth of consumption within the country, for sure, it will be possible to talk about the localization of production and, accordingly, about reducing the cost. Therefore, the above decision of the CIMT will be beneficial to all parties to the process.