PROPOSAL TO INVESTIGATE ANTI DUMPING HOT-ROLLED STEEL
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Information from the Ministry of Industry and Trade's Trade Remedies Authority (TRA) recently revealed that Hoa Phat Group and Formosa Company have submitted a request to the Ministry of Industry and Trade to investigate the application of anti-dumping measures against hot-rolled steel (HRC) products originating from China and India.
Additional Information Requested
After reviewing the investigation request files from domestic manufacturing enterprises, based on the provisions of Articles 28 and 30 of Decree No. 10 dated January 15, 2018, detailing some articles of the Law on Foreign Trade Management on trade remedies, the TRA has issued a notification requesting enterprises to submit additional information to clarify the allegations regarding the dumping behavior of imported goods, the damage to domestic production industries, and the causal relationship between dumping behavior and damage to domestic production industries in accordance with regulations.
Furthermore, the Ministry of Industry and Trade has also received opinions from other relevant enterprises expressing concern about the possibility of initiating anti-dumping investigations against imported HRC into Vietnam.
According to the TRA, the next procedure related to the case: After domestic manufacturing enterprises submit supplementary information and documents as requested, the TRA will review the files based on the provisions of the Law on Foreign Trade Management and Decree No. 10/2018. In cases where further information is required, the TRA will continue to request enterprises to complete and submit it.
In cases where the documents are complete and valid according to the provisions of the Law on Foreign Trade Management and Decree No. 10/2018, the TRA will have 45 days to review the detailed content of the files regarding the allegations related to dumping behavior, damage to domestic production industries, and causal relationships to make a decision on whether or not to investigate the case. During the review process, the TRA will carefully and objectively consider the information in accordance with the law.
If compared against the regulations, anti-dumping measures are applied when imported goods meet three conditions: specific determined dumping margins; significant damage or the threat of significant damage to domestic production industries; The existence of a causal relationship between condition 1 (dumping) and condition 2 (damage).
Considering the three factors for the current steel industry, signs of dumping are quite evident. Aggregate data from the Vietnam Steel Association shows a significant increase in imports of hot-rolled steel (HRC) from China and India, capturing a considerable market share of domestic hot-rolled steel.
In 2022, HRC imports from China reached over 3 million tons. By 2023, imports had increased to over 5.72 million tons, a rise of over 47%. Conversely, in 2022, the market share of domestically produced HRC from Hoa Phat and Formosa accounted for 45% of the total domestic market share. However, by 2023, the market share of domestically produced hot-rolled steel in the domestic market had decreased to only 30%.
Therefore, the significant increase in HRC imports in 2023 and the continued upward trend in the first quarter of 2024 have gradually eroded the market share of domestic production in the domestic market.
Difficult to Accept Higher Imports than Domestic Production
According to Dr. Vo Tri Thanh, Director of the Institute for Branding and Competition Strategy Research, enterprises' request for anti-dumping investigations is normal. State management agencies will follow the established procedures and international agreements that Vietnam has participated in when receiving requests. The most important thing is to assess the full impact; if anti-dumping duties are not imposed, how will it affect domestic production? If anti-dumping duties are applied to comply with international commitments while minimizing negative impacts on manufacturing enterprises, what will be the overall impact on the industry? Therefore, a specific and detailed investigation is necessary.
Regarding the submission of Hoa Phat Group and Formosa to propose an investigation into anti-dumping of imported HRC, at the Annual General Meeting in 2024 held on April 11, Mr. Tran Dinh Long, Chairman of Hoa Phat Group, also stated that this is normal. Many countries also conduct anti-dumping investigations against goods imported from Vietnam. The main issue is the excessively large amount of HRC imported into Vietnam. Specifically, in 2023, domestic HRC production was only 6.7 million tons, while total imports reached 9.6 million tons. Most recently, the amount of HRC imported through customs in the first quarter of 2024 was 3 million tons, while the two domestic HRC producers, Hoa Phat and Formosa, only produced 2 million tons.
The Chairman of Hoa Phat Group analyzed: steel is the "bread" of the industry. Looking at recent conflicts worldwide, it is easy to see the significant importance of steel to national defense and security.
According to statistics from the Vietnam Chamber of Commerce and Industry (VCCI), globally, from 2010 to the present, there have been 27 cases requesting investigations into anti-dumping measures against hot-rolled steel, with a 100% success rate in applying these measures, thereby demonstrating the importance of these trade remedies for the hot-rolled steel industry in many countries around the world.
Almost all countries with domestic hot-rolled steel production have initiated anti-dumping investigations into this product, such as the United States, Thailand, Brazil, the EU, Indonesia, India, Canada, Australia, etc. China and India are often listed among the countries accused of dumping hot-rolled steel products.
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