Japan and Korea Steel Dialogue, Agrees in Better Supply Balance in Asia

Japanese and South Korean delegations held the 11th steel dialogue in Tokyo on Wednesday. Japan expressed a strong concern about steel oversupply due to South Korean steel makers’ recent capacity expansions. Korea noted the inflow problem of stainless steel sheet from surrounding countries including Japan.

Korea explained the domestic steel demand has steadily recovered and the annual crude steel production is forecasted to increase by 18.3% to 57.46 million tonnes in 2010 from 2009. Korea pointed out the steel export increased by 25.4% for January-February from a year earlier while the import is also increasing.

Japan referred to the possibility South Korean steel makers’ aggressive capacity expansions may cause the imbalance of Asian steel supply and demand and expressed a preference for no emergence of new trade frictions.

Korea pointed out stainless steel hot coils or plates are inflowing to South Korean market at cheap prices from surrounding countries including Japan and the cheaper imports are confusing the domestic market. Korea explained Korean steel makers made an antidumping appeal against imported stainless plate on March 3rd and the trade committee is considering about whether to start the inspections.

Japan and Korea shared a concern about the iron ore business integration in Western Australia by BHP Billiton and Rio Tinto. Both delegations agreed in appealing the disapproval against the oligopolistic and anticompetitive integration in cooperation with China, European Union and other related countries.