According to the steel industry on Wednesday, the US Department of Commerce has imposed anti-dumping tariffs of 38.87 percent on local steel firm Nexteel and 22.7 percent on Seahsteel, effective June 14 for one year. As for other steel companies, the tariff rate was set at 29.89 percent.
Last year, the duties were 18.87 percent for Nexteel, 14.39 percent for Seahsteel and 16.58 percent for other firms.
Oil pipelines are steel materials used to draw oil or gas from oilfields. Last year, Korea exported oil pipelines worth $350 million to the US.
The US cited the “particular market situation” as legal grounds. PMS is an investigation method for the Department of Commerce to set tariff rates at its discretion on the grounds that documents submitted by an exporter may be insufficient.
The US government announces tariff changes every year on an unspecified date.
Korea’s Industry Ministry is not preparing any action in response to the move, viewing the tariff changes as part of an annual practice.
An industry source said the hike in tariffs could have a negative impact on local steel firms, which are facing uncertainties from global trade disputes and price surges in raw materials.
The price of iron ore, a key material for steelmaking, has risen around 70 percent from $70 per ton early this year to $120 in July. The price surge may also have an indirect effect on midsized steel companies, which would have to buy more costly base products, such as hot-rolled coil, from steelmakers Posco and Hyundai Steel.
As the prices of raw materials have continued to rise, the two steelmakers intend to drive up steel prices in the latter half of this year after posting sluggish performance in the second quarter.
In the latest quarter, Hyundai Steel saw operating profit fall about 40 percent, while Posco saw operating profit fall by 11.2 percent on-quarter.
Ham Young-cheol, chief of the sales division of Hyundai Steel, said in its conference call Tuesday that profits would improve in the latter half only if the rise in production costs is reflected in product costs.
Posco also hinted that it plans to increase steel prices, as prices of raw materials, including iron ore, are seeing an upward trend.
By Shin Ji-hye (firstname.lastname@example.org)