Local steel makers hit cheap imports from China

Following the filing of complaints by several private steel companies with the Department of Trade and Industry (DTI) about alleged illegal trade practices of Chinese exporters, the Philippine Iron and Steel Institute (Pisi) joined the chorus assailing the importation of 3,000 metric tons of supposedly finished steel products from China.

The Pisi—an organization representing the affected steel makers—said the imports came in the form of square steel bars and were artificially priced lower than the cost of the raw materials used, thus negatively affecting the local steel manufacturing industry.

The Pisi has written the DTI to protest the importation of 3,000 metric tons of square bars that are, according to the group, actually semi-finished steel billets. Since they were imported as finished products, the Chinese exporters were entitled to tax rebate of up to 17 percent, thus distorting the value of the imported commodity.

In the letter, Pisi president Roberto M. Cola complained to Trade and Industry Secretary Gregory Domingo about the “unfair trade practice” allegedly through the collusion between Philippine importers and Chinese exporters.

The shipment of 3,000 MT of square bars arrived last month at the Harbor Center in Manila.

Cola said Pisi decided to bring the issue to the DTI because of the circumstances surrounding the shipment.

Aside from the alleged underpricing of the steel products, Cola said the unfair trade practice could also be traced to Chinese steel mills of questionable quality and reputation.

“There is a high probability that the properties of these steel products that will be used as reinforcement for buildings and infrastructure projects do not meet our national standards,” said Cola. “This will endanger the lives and safety of the public because of the substandard rebar products.”

Pisi warned that the continued importation of these products would lead to the collapse of the legitimate local steel industry.

“The influx of cheap, uncertified and illegal steel goods from China affects the livelihood of the thousands employed due to the manufacture of steel,” Pisi said in the letter, adding that the collapse of the local steelmaking industry would in turn lead to the loss of investor confidence in the country and would put at risk the billions of pesos in investments that were already in the pipeline for the growth of the local steel industry.

Pisi noted that both the DTI and the Board of Investments had been encouraging the growth of Philippine industries, including the local steel sector.

The local industry has been building capacity and modernizing its operations and processes to better take advantage of the country’s scrap metal generation potential. More expansions are being planned in anticipation of the government’s infrastructure buildup program. The expansion projects in the pipeline include SteelAsia Manufacturing Corp.’s $400-million manufacturing facility in Bulacan, which will have a capacity of 1.2 million metric tons.