Large steel companies in South Korea, including POSCO, are contemplating filing anti-dumping lawsuits against foreign producers of hot-rolled steel sheets. The move has stirred opposition from Korean rolling and pipe manufacturers who had been using competitively priced foreign hot-rolled steel sheets to maintain their price competitiveness, raising concerns about potential repercussions.

According to sources on Tuesday, major steel producers such as POSCO are internally considering responding to imported hot-rolled steel sheets from countries like China and Japan by imposing anti-dumping tariffs. A POSCO spokesperson said the company is internally reviewing various response measures regarding imported materials but has yet to make a decision.

Major steel producers argue that the low-priced imported steel is disrupting the Korean market. According to POSCO, domestic sales of hot-rolled steel sheets fell by about 200,000 tons in 2023 compared to the previous year. Hot-rolled steel sheets are not only used as end products but also serve as raw materials for cold-rolled sheets and coated sheets.

As it faces weak domestic demand, China exports excess production to Korea due to its geographical proximity and the absence of trade protection mechanisms. Japan is also pushing its products into the Korean market at prices lower than domestic sales.

As a result, the import of hot-rolled steel sheets in South Korea has been increasing annually. According to the steel industry, the import volume of hot-rolled steel sheets from China and Japan totaled 4.22 million tons in 2023, up 24 percent from a year ago.

The retail prices of foreign hot-rolled steel sheets currently circulating in Korea are at levels 5 to 10 percent lower those for their Korean counterparts.

Small and medium-sized rolling and pipe manufacturers, which source steel products from major suppliers, are showing a sensitive response to the possibility of anti-dumping tariffs. There is concern that if a few companies dominate and maintain high prices, demand-side companies could suffer. Hot-rolled steel sheets account for 20 to 30 percent of the imported steel volume, and there could be a significant impact on the Korean market if anti-dumping tariffs are applied.

By Cho Yun-hee and Minu Kim

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