Barriers to Chinese steel tightened

Barriers to Chinese steel tightened

Spurred by US claim of transshipment

Chinese Rolled steel is seen at a warehouse awaiting customs inspection. (Photo via Alibaba.com)
Chinese Rolled steel is seen at a warehouse awaiting customs inspection. (Photo via Alibaba.com)

The government is tightening measures to prevent Chinese steel and aluminium products shipped through Thailand from circumventing US tariffs after the US inspected some and claimed the exports were really from China.

Wanchai Varavithya, deputy director-general of the Foreign Trade Department, said the US has claimed Thailand is allowing other countries to use local operation sites to avoid the US anti-dumping or countervailing measures it launched to protect its local industries.

On March 8, Mr Trump ordered a steep 25% tariff on steel and 10% tariff on aluminium imports to the US, citing national security considerations under Section 232 of the Trade Expansion Act of 1962.

"The claim is tariff avoidance is happening through transshipment and assembly in Thailand," Mr Wanchai said. "The department will team up with the Customs Department to restrict steel imports and exports. We will send the list of anti-dumping products and company names under the Section 232 to our customs counterparts for inspection."

The US has launched anti-dumping measures mainly against China for 169 products such as steel, aluminium, machinery, TVs, furniture, washing machines, food and beverages.

Mr Wanchai said the department's priority is to create a database of local products for tariff avoidance. For example, an abnormal increase in export value will cause it to request from its US counterpart connection to its import database for further inspection of dumped products.

"The department will also join hands with the Federation of Thai Industries [FTI] and Thai Chamber of Commerce to inspect each certificate of origin [C/O] that these agencies have issued for exporters," he said.

Korakod Padungjitt, secretary-general of FTI's iron and steel club, said it agrees with the Foreign Trade Department restrictions on C/O inspections.

He said the department should consider carefully the domestic steel situation, including machinery and equipment imports for local steel plants, mainly from China, as they are concerned with any impacts on the overall steel industry.

Local steelmakers are calling for the Industry Ministry to carefully consider approval of factory licences in the country after witnessing that some investors are trying to request these licences to operate steel plants locally.

Wikrom Vajaragupta, the club's chairman, said Thailand's market faces two risk factors -- steel exports from China to Southeast Asia and new steel plants from overseas investors.

"Local producers are unable to compete with the giants from China. And overcapacity in the region will affect the overall steel industry as some producers import machinery to increase their local capacity," he said.

The steel industry produces steel bar for the construction sector, which receives 60% of the supply. Other sectors are automotive (15%), home appliance (7%) and machinery (9%).

The country's steel industry has a combined capacity of steel bar of 8-9 million tonnes, but local demand accounts for 3-4 million tonnes.

Mr Wikrom said China's steel policy aims to reduce its domestic steel production down to 150 million tonnes in 2020. As a result of this policy, many Chinese producers have shut down steel plants in China for a couple of years.

In 2017, China's steel exports totalled 75 million tonnes. The country made shipments of 15-15.5 million tonnes in the first quarter.

Thailand imports from China 5-6 million tonnes of steel a year, and the country has demand of 16.5 million tonnes.

Moreover, local steelmakers are concerned about small steelmakers importing low-quality machinery for their operations in the country, as the volume of low-quality steel products in the local market may increase, said Mr Wikrom.


Do you like the content of this article?
COMMENT (4)

Alec Baldwin at centre of on-set shooting tragedy

Hollywood star Alec Baldwin was the focus on Friday of investigations into a shocking and deadly on-set tragedy, after the actor fired a prop gun that killed a cinematographer and wounded the director of a Western he was shooting in New Mexico.

22 Oct 2021

Nine held after major drug busts in Chiang Rai

Police have arrested nine members of a major drug trafficking gang in two cases and seized a total of 2 million speed pills, 67 kilogrammes of crystal methamphetamine and 7kg of heroin in Chiang Rai

22 Oct 2021

K-pop stars BTS leaving Sony for Universal

The K-pop boy band BTS is ending its distribution deal with Sony Music’s Columbia Records and will instead partner with Universal Music Group.

22 Oct 2021