Imports of some corrosive-resistant steel from China may be taxed as much as 236 percent based on the level of subsidies they receive, according to a preliminary finding by the U.S. Department of Commerce.
The department found five Chinese exporters including Angang Group Hong Kong Co. and Baoshan Iron & Steel Co. got subsidies of that amount, it said in an e-mailed statement. U.S. Customs and Border Protection will be instructed to require cash deposits based on the subsidy rates. A Baosteel spokesman said the company’s operations are based on market forces.
The preliminary finding is the first decision in three sets of trade cases that U.S. steel producers have filed this year, as a glut of output from foreign producers led by China has pushed down prices to nine-year lows and seen U.S. mills idle 31 percent of capacity. If validated, the decision may end some imports and help lift domestic prices.
“Trade cases will have an impact by limiting tons showing up in the U.S.,” Timna Tanners, an analyst at Bank of America Corp., said Tuesday before the decision was made public. “If you take out the lowest-priced tons in the U.S., those offers going away should tighten the market.”
The move will curb Chinese exports to North America, Wang Yingsheng, deputy secretary-general at the China Iron & Steel Association, said from Beijing, while estimating the U.S. takes only about 3 percent of overseas sales. Shipments are facing increasing trade friction globally and probably won’t exceed 100 million metric tons in 2015, he said by phone. Sales surged 27 percent to 83 million tons in the first nine months.
The five Chinese companies that were determined to get subsidies of 236 percent didn’t participate in the probe. Another company, Yieh Phui (China) Technomaterial Co., received a subsidy rate of 26.3 percent, the Department of Commerce found.
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