Korea's steel giant POSCO will endure the most as the US Commerce Department also slapped anti-subsidy duties of 57 percent on the company. It will be worth to mention here that South Korea's POSCO and Daewoo International received a 57.04% subsidy rate, which was based on adverse facts available because Commerce was not able to verify parts of POSCO's questionnaire response.
The same duty set for most other steelmakers in Brazil, Turkey and even a different steelmaker of Korea, Hyundai Steel range between four and eleven percent.
However, the U.S. move to protect its own steel industry may not yield as the country's International Trade Commission has to take the final call. The commission is due to make a decision by late September on whether steel imports have damaged local producers.
US Department of Commerce imposed a 9.49% dumping margin for Hyundai. POSCO received a 3.89% dumping margin, but no cash deposit because it was adjusted for the export subsidies identified in the countervailing duty investigation. All other South Korean companies are subject to a 5.55% dumping margin. Because of the rulings, Commerce will instruct US Customs and Border Protection to collect cash deposits based on the duty margins.
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The Department of Commerce on Friday (5th Aug) decided to impose anti-dumping duties on HR Steel imports from seven countries, including Korea and Japan. Hot-rolled steel products are mainly used in construction fields, automobiles and heavy machinery and the largest share of US imports come from Korea.
The US International Trade Commission must also make final determinations that US steelmakers have been injured or threatened with injury by HRC imports that have been dumped and subsidized for the duty orders to be finalized. According a reliable source the ruling would make imports from POSCO, Australia's BlueScope Steel and Tata Steel UK uncompetitive. However, exports to the US by Tata Steel Ijmuiden in the Netherlands, Hyundai, Erdemir, Colakoglu and Japanese mills are still workable with their duty margins, the source said.
American steelmakers argue that prices are plunging below cost due to a global supply glut and that foreign steelmakers are dumping products to the US, which is the only market generating stable demand. Korean steelmakers, on the other hand, say the lower prices are prompted by low oil prices.
POSCO is considering all options, including filing a petition to the World Trade Organization.