China's steel industry grows in the "double-reverse" trade war

In the ten years since China's accession to the WTO, China's foreign trade has not been as "perfect" as expected. With the continuous improvement of trade volume and international status, "double-reverse" has become more and more familiar to people; The most common channel for knowing this term is that Chinese companies are investigated and prosecuted one after another.

Obviously, in such a big environment, the Chinese steel industry is not likely to be spared. Whether it is exporting steel or investing in resource products, the overseas troubles of Chinese steel companies have never been interrupted.

Overseas friction constantly

[Foreign companies continue to block]

"Now, it is more and more difficult for Chinese steel companies to invest overseas. On the one hand, Chinese steel companies are not well funded; on the other hand, foreign companies are constantly blocking them." Some experts have expressed this view.

Take China Steel Group Corporation (referred to as Sinosteel) and CITIC Pacific Co., Ltd. (referred to as CITIC Pacific) in the huge investment in the field of iron ore in Australia. For example, the projects invested by the two companies have encountered difficulties in 2011 – Sinosteel The Australian iron ore project was temporarily suspended due to port problems, and CITIC Pacific's iron ore project has significantly reduced its competitiveness due to rising costs.

The three major mines continued to stop when Chinese steel companies “goed out”. The loss of Wuhan Iron and Steel Group Corporation (Wugang)’s acquisition of the African coking coal project originated from Rio Tinto’s halfway. In this regard, WISCO general manager Deng Qilin once said that WISCO will focus on developing overseas projects that have already been invested.

[Chinese steel enterprises are trapped in the "double anti-" mire]

From the current point of view, apart from the blockade of foreign-funded enterprises, the largest and most frequent international troubles encountered by the steel industry are the interventions of governments. In recent years, countries and regional organizations headed by the United States have been continually fighting for the "double-reverse" cases of Chinese steel.

The international sanctions against the Chinese steel industry were originally on November 5, 2009. The US Department of Commerce initially ruled that anti-dumping duties of up to 99.14% should be imposed on oil well pipes imported from China. In response, the US Department of Commerce announced that the price of oil well pipes sold by Chinese manufacturers and exporters in the US was lower than normal, so it decided to impose 36.53% anti-dumping duties on 37 Chinese companies, and other Chinese companies will be levied up to 99.14%. Anti-dumping duties.

On December 30, 2009, the US International Trade Commission finally approved a tariff of approximately 10% to 16% on Chinese-made petroleum steel pipes. The vote on the day meant that the US Department of Commerce’s ruling on the Chinese steel pipe that imposed a 10.36% to 15.78% countervailing duty on November 24th was passed, and the ruling immediately came into effect. The U.S. tax on Chinese steel pipes is also the biggest sanctions against trade to China so far.

Then, on January 21, 2010, the US Department of Commerce decided to launch a double-reverse investigation on the drill pipe imported from China. The relevant applicants claimed a dumping tax rate of 429.53% to 496.93%.

In addition, the EU has imposed severe sanctions on the trade of the Chinese steel industry in Europe.

As early as September 2010, the EU began an anti-dumping investigation on seamless stainless steel pipes originating in China. According to the announcement, no Chinese company can obtain market economy treatment, and all enterprises involved are subject to temporary anti-dumping duties ranging from 48% to 71.5%. Among them, three sample companies obtained separate rulings: Wenzhou Jiangnan Steel Pipe Manufacturing Co., Ltd. was sentenced to impose a minimum temporary anti-dumping duty of 48%, Shanghai Jinchang Stainless Steel Pipe Manufacturing Co., Ltd. 48.2%, and Jiangsu Changshu Huaxin Special Steel Co., Ltd. 71.5%.

After a lapse of one year, on June 29, 2011, the European Commission issued an announcement to make an anti-dumping preliminary ruling on seamless stainless steel pipes originating in China. The enterprises involved were ruled to impose a temporary anti-dumping duty of 48% to 71.5%. At this point, China’s export to the EU is almost blocked.

Join forces to fight back

[China Steel's counterattack]

In many cases of double-reverse investigations, WISCO’s experience can be described as “tragic”. Since 2011, WISCO has been subjected to four anti-dumping investigations in seven months. The high density is staggering, and the amount involved is as high as $51.92 million.

In the first half of 2011, Wuhan Iron and Steel Company was riddled with international lawsuits and was subjected to four anti-dumping investigations from Russia, Brazil, Indonesia and Thailand, but WISCO's performance was quite calm. A related person from the China Iron and Steel Association said that this anti-dumping investigation is simply not worth mentioning for WISCO, which has experienced war. The person said that WISCO has always been more active to respond, it should be said that in recent years, WISCO's participation in these anti-dumping investigations have won, especially for the EU's galvanizing and color coating, has not yet defeated.

At the same time that China's export of steel products has frequently suffered from foreign anti-dumping and anti-subsidy investigations, imported steel products are also constantly impacting domestic steel enterprises. In this regard, two stainless steel seamless pipe manufacturers - Jiangsu Wujin Stainless Steel Pipe Factory Group Co., Ltd. and Changshu Huaxin Special Steel Co., Ltd., submitted an anti-dumping investigation application to the Ministry of Commerce on behalf of domestic related industries, requiring the origin of Anti-dumping investigations on high-performance stainless steel seamless steel pipe products imported from the EU and Japan.

Subsequently, the Ministry of Commerce issued a notice stating that, starting from September 8, 2011, it officially investigated the dumping and dumping margins of the above-mentioned imported products originating in the EU and Japan and the extent of damage and damage to the Chinese similar products industry. This is the first time since 2011 that China has conducted anti-dumping investigations on foreign steel products.

Compared with the attitude of companies such as WISCO, which responded positively and resisted, a private steel company that was also subject to anti-dumping investigations by Brazil and Thailand chose the attitude of ostrich. Insiders of private steel enterprises revealed that the company feels that the chances of winning the case are small, and the annual demand for exporting to those countries is not large; in other words, it does not matter if the markets such as Brazil and Thailand are lost.

However, there is no doubt that with the strengthening of the trend of international trade protectionism, the probability of China's steel industry import and export trade facing anti-dumping investigations will only rise and fall, and the ostrich policy is obviously not the solution to the problem. In addition, compared with developed countries such as Japan and the United States, the quality gap of most products has become smaller and smaller, which poses a threat to the steel industry in Southeast Asia and South America. Therefore, the Chinese steel industry is caught in the anti-dumping quagmire, it is not overnight. Can be solved.

To solve the bell, it is necessary to ring the bell. Since the improvement of the structure and quality of China's steel products has caused some countries to frequently raise anti-dumping sticks, then the way to deal with them naturally has to start from products, for example, research on importing countries. The structure of steel products, in order to avoid its edge, the main complementary products.

In addition, anti-dumping is due to domestic protection, because the same products in China can be used instead, but if our products are unique, there is no anti-dumping problem. Therefore, it is also important to improve the competitiveness of your core products.

[Chinese government boycotts trade protectionism]

At the 2011 Annual Meeting of the Boao Forum for Asia, officials and business people from various countries also expressed their opposition to various forms of trade protectionism.

According to the "2011 China Foreign Trade Situation Outlook" issued by the Ministry of Commerce of the People's Republic of China, since 2010, the economic recovery process of various countries has been further diversified, and the macroeconomic policies of major economies such as the United States, Europe, and Japan have strengthened their self-esteem and trade protectionism has warmed up. As the world's largest exporter, China has become the "hardest hit" of international trade protectionism. The Ministry of Commerce of China issued a report saying that China’s export commodities have been the focus of anti-dumping investigations by WTO members for 15 consecutive years. In 2009, the trade remedy investigations initiated by countries and regions on China's export products reached a record high of 127.

Therefore, at the 2011 annual meeting of the Boao Forum for Asia, which is dedicated to promoting economic integration and economic cooperation in Asia, China once again emphasized its opposition to various forms of trade protectionism. In his speech at the forum, Chinese President Hu Jintao said that it would promote the establishment of a balanced, inclusive and win-win multilateral trading system, oppose various forms of protectionism, and promote the development of the international economic order in a more just and rational direction.

Hu Jintao’s views were supported by other participants. Indian Minister of Industry and Commerce Sharma, who participated in the Boao Forum for Asia, said that the issue of currency depreciation should be discussed to promote the Doha Round negotiations and ensure equal competition among countries. Former US Treasury Secretary Paulson said that trade protectionism is not conducive to the development of the business community. For anti-trade protectionism, the government should not behave differently.

Subsequently, at the 23rd Ministerial Meeting of APEC, Chinese Minister of Commerce Chen Deming also called on the WTO members to have a long-term perspective and make some concessions to jointly advance the Doha Round. All parties should be highly vigilant. And with actual actions to resist and abolish all kinds of protectionism, use less, use with caution, and not abuse trade remedy measures to prevent politicization of economic and trade issues.

Chen Deming said that since the Yokohama Conference, protectionism has risen and China’s protectionism has been seriously damaged. From January to September 2011, China has suffered 50 trade remedy investigations involving a total amount of US$3 billion. He warned that once protectionism is rampant, it will cast a shadow over Asia-Pacific economic cooperation and make the world economy worse.

Growth in the storm

Although "double-reverse" is like a ghost, it has been entangled in the international trade of Chinese steel, but the pros and cons are all in one, and the one-off double-reverse investigation brings not only constant restrictions and blows to Chinese steel companies, but also There are more important enhancements in their own capabilities, product quality, industry systems, and more active ways and attitudes to integrate into international trade.

In addition, the road to market in this decade is not without success.

Take Valin Steel as an example. In 2010, Valin Steel invested FMG (the third largest iron ore producer in Australia) with a transaction value of A$1,277.8 million. Since then, Valin has become the second largest shareholder of the board of directors Andrew Forrest, with 17.3% of the company's shares and the capital of a director.

Hualing is building this project from the long-term interests, and FMG urgently needs the support of Chinese capital and market in the global economic downturn, which creates a good opportunity for Hualing's low-cost intervention. Since then, FMG's share price has risen from A$2.37/share at the time of the shareholding in February 2009 to A$4.82/share on November 11, 2011, and Valin's return on investment exceeded 200%.

In the low post of the financial crisis, Valin invested in FMG. As the world economy gradually stabilized, FMG's production and operation steadily increased, and its potential is huge. At present, FMG is developing well.

Another successful example is Sichuan Hanlong's acquisition of African SDL.

In March 2011, Hanlong Mining, a subsidiary of Sichuan Hanlong Group, invested approximately A$200 million (equivalent to approximately RMB1.2 billion) and acquired a 16% stake in Sundance Resources Ltd (SDL), a large African iron ore company. Through this acquisition, Hanlong owns 19% of SDL and becomes the company's largest single shareholder.

SDL, listed on the Australian exchange, is one of the world's few unexplored large-scale iron ore projects. It is expected that the 10 billion tons of iron ore resources will strengthen the Hanlong Group's right to speak on iron ore. . The project is expected to reach a production scale of 100 million to 200 million tons in the later period. By then, Hanlong will also rank among the top five iron ore producers in the world.

Another gratifying thing is that since the accession to the WTO, the number of patent applications filed by Chinese steel companies (including steel research institutes) has been increasing year by year. Especially since 2006, the patent application for the steel industry has grown rapidly, with an average annual growth rate of over 30%. Some experts believe that the increase in the number of patents will be of great benefit to Chinese steel enterprises in enhancing their competitiveness and protecting their own interests, and will help to crack down on foreign technical barriers.

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