Japan’s major steel manufacturer, Nippon Steel, has urged the Japanese government to impose anti-dumping duties on Chinese steel exports to protect the domestic industry.
Takahiro Mori, Vice Chairman of Nippon Steel, recently told Reuters that Nippon Steel and other Japanese steelmakers are urging Tokyo to consider restricting the influx of cheap steel imports from China, as the United States, Europe, and South Korea have already implemented related trade relief policies.
Chinese steel plants are currently facing a double whammy – domestic economic downturn and external resistance. The financial reports of several Chinese steel enterprises indicate a sharp decrease in domestic steel demand due to the ongoing slump in the real estate sector, leading to a surplus of unsold metal that urgently needs to find overseas markets.
In the first half of 2024, Chinese steel exports increased by 24% to 53 million tons, with a projected annual export volume of 100 million tons. Data from the Japan Iron and Steel Federation shows a significant 17% increase in imports of ordinary steel to Japan in the second quarter of this year, with imports from China surging by 43%.
Mori stated, “With domestic demand in China decreasing by approximately 30 million tons annually, the volume of steel exports may continue to rise.”
He estimated that due to the sluggish demand in the Chinese real estate sector, domestic steel demand in China would remain weak this year.
“We are lobbying the Japanese government to consider measures, including imposing anti-dumping duties,” he said.
Mori pointed out that with many countries including the United States, Europe, and South Korea taking defensive measures to restrict Chinese steel imports, if Japan were the only country without such measures, there would be a surge of Chinese steel exports into Japan.
“If we do not take protective measures, the Japanese market could face problems,” he added.
According to public information, Chinese steel enterprises are shipping the surpluses of metal at extremely low prices overseas. Countries like Brazil, Vietnam, India, the Philippines, and Turkey are all conducting anti-dumping investigations on Chinese steel.
At the end of last month, Nippon Steel withdrew from a joint venture with Baoshan Iron & Steel Co., Ltd., a publicly listed subsidiary of Wuhan Iron and Steel Group. Mori stated that Nippon Steel will decide on its other joint ventures in China based on specific circumstances, and added that the company’s strategy is to expand its investments in the United States, India, and the ASEAN region.
Mori mentioned that this globally fourth-ranked steel manufacturer is eager to complete the $14.9 billion acquisition of an American steel company by the end of 2024, which would lead to an increase of 30 to 40 billion yen (approximately 208 to 277 million USD) in Nippon Steel’s quarterly profit.
The acquisition by Nippon Steel has faced opposition from some Democrats and Republicans.
He said, “If it wasn’t an election year, this deal would have been completed long ago.” He plans to visit the United States next month to meet with investors, marking his fifth visit to the country this year.
He had previously met with Tim Walz, the Democratic vice-presidential candidate and governor of Minnesota, at the opening ceremony of a factory in Minnesota in June. Mori noted that the governor responded “very positively” to Nippon Steel’s investment in American steel.
To garner support from political figures and unions, Nippon Steel has also hired the former US Secretary of State Mike Pompeo, a Republican, as an advisor, and announced a plan this week to invest an additional $1.3 billion in American steel plants.