Stainless steel producer Posco Assan has filed an anti-dumping application, stating that countries such as China, Indonesia and Taiwan have difficulty in competing due to dumped price levels that lead to unfair competition.
POSCO Assan's domestic market share has fallen to 50% in recent years due to this situation, while its market share has fallen to 26%.
In order to prevent unfair competition, Türkiye has started to take various protection measures.
Within the last year, customs duties have been increased from 9% to 15% on hot rolled steel, from 10% to 17% on cold rolled steel, and from 15% to 20% on galvanized and prepainted steel. With these new measures, POSCO ASSAN TST, as a domestic producer, filed an anti-dumping application to counter unfair competition in the market. As a result of the investigation, additional customs duties may be imposed on imported products or imports may be restricted. While the additional tax that may occur in this case creates unrest in the market, Posco Assan made a statement on the subject. The statement released as follows;
"Dear Customers and Sector Representatives,
POSCO ASSAN TST was established in 2011 with the partnership of Kibar Holding and POSCO, taking into account Türkiye's strategic location and development potential, with an investment of 350 million dollars without any state aid or incentives, and started its production activities in 2013. With this investment, it is aimed to bring a flat rolled stainless steel production facility to our country and to reduce the foreign dependency of the Turkish economy.
Until today, POSCO ASSAN TST has produced over 2 million tons of stainless steel, substituting imports worth over 3 billion dollars and exporting over 1.5 billion dollars, providing foreign currency inflow to the economy. The high quality cold rolled stainless flat rolled steel products it produces are used by many sectors that are the locomotive of the Turkish economy and exports.
The apparent consumption (domestic production + imports - exports) of cold rolled stainless flat steel products in Türkiye was 346,886 tons in 2023. POSCO ASSAN TST's production capacity is 419,661 tons according to the capacity report of Kocaeli Chamber of Industry, and it can cover 86% of the domestic market consumption with its useful capacity calculated as 300,000 tons/year due to the fact that domestic market consumption is mainly concentrated on many different quality specifications between 0.30 mm and 2.00 mm thicknesses.
Our factory, however, has been struggling to compete, especially in recent years, due to the dumped prices of countries such as China, Indonesia and Taiwan, which have led to unfair competition. Imports from Far Eastern countries such as China and Taiwan, whose stainless steel production capacity is 3-4 times higher than their domestic market consumption, and Indonesia, whose production capacity is 38 times higher, have increased by 150%. As a result, since 2019, POSCO ASSAN TST's capacity utilization rate has gradually decreased to 50% and its domestic market share to 26%.
Our country is under threat from Far Eastern producers not only in stainless steel but also in other steel products. In order to prevent unfair competition and protect the domestic market, various safeguard measures have been taken for many iron and steel products in the last year. For example, the customs duty on hot rolled steel was raised from 9% to 15%, on cold rolled steel from 10% to 17%, and on galvanized and painted steel from 15% to 20%. In addition to these measures, safeguard measures have been and continue to be taken by opening anti-dumping investigations against both Far Eastern and European Union producers in many iron and steel products.
Türkiye is not the only country whose local market is under threat due to dumped prices leading to unfair competition. In many countries such as the EU, the USA, Thailand, India, Brazil, Taiwan, Vietnam, etc., various safeguard measures of up to 58% are applied against Far Eastern cold rolled stainless flat rolled steel products producers.
Within this framework, our company has applied for anti-dumping as a domestic producer in order to ensure the holistic development of the economy and our sector, to protect employment, to reduce foreign dependency, to carry out imports in accordance with the requirements of international trade, to prevent unfair competition and to encourage new investments in the sector.
Anti-dumping measures involve an investigation process to determine whether imports of a product are causing harm to local producers. This process usually consists of the following steps;
1. Application: Domestic producer claims that imported products are causing injury by dumping and files an anti-dumping application with the trade authorities.
2. Investigation: The authorities launch an investigation to assess the application. In this process, data on the price of the imported product is collected and analyzed. In addition, the situation of the local producer is also assessed.
3. Provisional Measures: While the investigation is ongoing, provisional measures may be applied. These measures may take the form of adding a customs duty on the imported product or restricting the quantity of imports.
4. Final Decision: Upon completion of the investigation, the authorities make a final decision. This decision may be the imposition of anti-dumping duties, the lifting of provisional measures or no measures at all.
In brief, this is the process.
In terms of the continuation and sustainability of Türkiye's economic development, supporting industrial production with imported raw materials is undoubtedly of critical importance. As Türkiye's 79th largest industrial organization, POSCO ASSAN TST is not against imports and exports under fair competition conditions.
We would like to share with you the correct data and facts about the allegations that have recently come to the agenda.
- Allegation: There is no stainless steel production in Türkiye and domestic market consumption is close to 1 million tons.
- Reality: POSCO ASSAN TST produces approximately 200-240 thousand tons of cold rolled stainless steel in Türkiye annually. In 2023, total domestic market consumption including hot and cold rolled products was 442,586 thousand tons. The amount of hot rolled steels imported for cold rolling should not be double-counted when calculating the total domestic market consumption. Moreover, it is incorrect to include the amount of hot and/or cold rolled stainless steel imported from third countries and exported abroad in the domestic market consumption.
- Allegation: If an integrated production facility of 1 million tons is established, Türkiye's stainless steel exports will increase to several billion dollars.
- Reality: The EU has a Safeguard quota of 80,000 tons for cold rolled stainless steel imports from Türkiye and a 25% additional tax is imposed on imports above this tonnage. In addition, the EU imposes a 17.3% duty on Turkish exports of hot rolled products under the anti-circumvention measure. The United States, on the other hand, imposes a 25% duty on all flat stainless steel imports from Türkiye under Section 232. Since the amount of exports that can be made to unprotected markets such as the CIS and MENA, which have relatively low stainless steel consumption, is quite limited, it is unfortunately not possible to realize billion dollar exports in the current conjuncture. Therefore, it is not feasible to invest in a plant with a capacity of 1 million tons or more when the current domestic market consumption is around 500 thousand tons.
- Allegation: The EU Commission imposed an A/C (anti-circumvention) measure to prevent the export of cold-rolled stainless steel by steel service centers and traders in Türkiye upon the request/application of POSCO ASSAN TST.
- Reality: The EU Commission opened an anti-circumvention investigation at the request of European producers on suspicion that some companies based in Taiwan, Vietnam and Türkiye were circumventing existing safeguard measures by exporting products originally originating in Indonesia under different origins. In this process, our factory, like all other companies, was unable to export. Since the exemption in A/C investigations is granted only to exporters who are "producers", as a result of the investigation, many leading and reputable steel service centers of our industry unfortunately lost the opportunity to export to the EU. This has caused the disruption of not only our country's exports but also potential investments planned for stainless steel production in our country.
- Allegation: The 12% customs duty imposed on cold rolled stainless steel products restricts exports of goods made of stainless steel.
- Reality: The related product is imported with "0" customs duty and VAT exemption within the scope of the Inward Processing Certificate provided to the EU, FTA countries and manufacturers exporting goods made of stainless steel.
- Allegation: POSCO ASSAN TST demands that customs duties be increased to 25% and anti-dumping duties of 22-40% be applied.
- Reality: POSCO ASSAN TST has not requested an increase in customs duty to 25% until today. As a result of the anti-dumping application, whether or not a safeguard measure will be applied and, if so, the tax rate will be determined at the discretion of the ministry officials based on technical data. POSCO ASSAN TST has not requested a specific rate.
Summarizing; we kindly request that this and similar comments and allegations that are erroneous or unconnected with the facts are not taken into consideration.
Sincerely, POSCO ASSAN TST"
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