On April 10, China's Ministry of Commerce (MOFCOM) responded to US steel pipe makers which are seeking an investigation into steel pipe imported from China. MOFCOM stated that the case has a significant impact on China's iron and steel industry's exports to the US, and that the Chinese government is greatly concerned over the issue. China believes that resorting to trade protectionism will not solve the real problems faced by the US industry.

 

On April 8, 2009, U.S. makers of steel pipes and a related trade association formally filed a petition to the US Department of Commerce and the US International Trade Commission (USITC), seeking an anti-dumping and countervailing duty investigation into steel pipe imported from China used in oil and gas drilling.

 

MOFCOM spokesman Yao Jian pointed out that the fundamental reason causing difficulties in related US industries was a dramatic decline in consumer capacity and consumer demand brought about by the financial crisis. However, blaming the difficulties on imported products and making unreasonable accusations that imported products are dumped or subsidized lacks factual evidence.

 

Yao emphasized that the recently-concluded G20 financial summit in London reiterated that all countries should work together to fight protectionism and avoid setting new trade and investment barriers. Since the Chinese side has always advocated industry circles from both sides solve issues through consultation and communication, it hopes that the US administrative authority will not send the wrong signal to the world and can uphold agreements made at the G20 Summit resisting protectionism when deciding whether or not to carry out an investigation.

 

At the fourth Sino-US Steel Dialogue held in October 2008, China, as the largest iron and steel producer and consumer in the world, said that when competing with foreign enterprises in the same industry under fair market conditions, Chinese iron and steel enterprises do not require any government subsidies and they have adopted many measures to control exports of steel materials.

 

Since the beginning of this year, European countries and the US frequently launched trade remedy measures against China's iron and steel products. On February 19, 2009, the USITC made a final ruling, stating that circular welded stainless steel pressure pipes from China have caused material damage to the US industry. The countervailing duty rate imposed on Chinese enterprises is 1.10 percent, and the anti-dumping duty rate is between 55.21 percent and 299 percent.

 

On April 8, the European Commission released an announcement stating that it has decided to levy a provisional anti-dumping duty of between 15.6 and 24.2 percent on China-made seamless steel pipes.

 

Shan Shanghua, Secretary-General and Chief Analyst of the China Iron & Steel Association, recently pointed out that since September 2008, the price of China's steel materials has slumped, steel production has fallen dramatically, exports of steel materials have dropped, and a deficit has been recorded across the entire industry.

 

Shan believes that since developed economies are currently going into recession, emerging economies are suffering from noticeable downturns, the international market is further shrinking, and demand is falling by a large margin. To add to this trade protectionism is increasing so exports of China's iron and steel products will drop considerably. As direct and indirect exports of iron and steel products account for 24 percent of the total output of iron and steel, the gap cannot be made up by boosting domestic demand.

 

According to customs statistics, China exported 1.91 million tons of steel materials in January this year, a decrease of 54.6 percent year-on-year. In February, the export volume was only 1.56 million tons, down by 49.7 percent year-on-year. –People’s Daily Online