Users unhappy with Vietnam plan for anti-dumping taxes on stainless steel imports

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Cold rolled steel at a foreign company. Photo courtesy of Thoi bao Kinh Te Saigon Online

Vietnam is considering anti-dumping duties on stainless steel imports following a demand from the local industry despite vehement protests from users.

The Vietnam Competition Authority has ruled that mainland China, Malaysia, Indonesia, and Taiwan dump stainless steel, and called on the trade ministry to impose taxes of 6.45 to 30.73 percent on their products for 120 days, Thoi bao Kinh te Saigon Online reported Wednesday.

Hanoi-based Inox Hoa Binh and South Korea's Posco VST, which hold an 80 percent share of the stainless steel market, in June demanded a 20-40 percent anti-dumping tax on stainless steel imports that cost up to 25 percent less than local products.

It was the first case of its kind since the country enacted relevant regulations in 2004 though Vietnamese companies have often been sued for dumping by other countries.

Vietnam imposes up to 10 percent tax on stainless steel imports, but cold-rolled steel from China and ASEAN member countries attract no tariffs.

Korean-owned Posco VST, which owns the biggest cold rolling plant in Vietnam -- of 235,000-ton capacity -- said the cheap imports caused losses for it.

Dinh Huy Tam, former general secretary of the Vietnam Steel Association, said stainless steel imports have increased recently at the expense of local producers like Hoa Binh and Posco.

"This is a positive step for both local steel companies and government agencies," he said.

But 18 stainless steel processors and home appliance and construction-materials producers, who consume stainless steel, in October petitioned the ministry to reject the lawsuit, and have said they will continue to fight.

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Their petition said Posco VST and Inox Hoa Binh "are not in a position" to file the lawsuit since they basically are not stainless steel producers.

Posco itself imports large quantities of stainless steel from its plants in mainland China, Hong Kong, Korea, and Thailand to process at its cold rolling plant.

Inox Hoa Binh imports from China and Indonesia.

The petition warned that the two would take over the entire market if their request to tax imports is accepted.

Pham Quoc Vu, deputy director of inox distributor and processor Dai Duong International, said he and other insiders were "shocked and disappointed" with the proposal.

"[The competition agency] deliberately ignored our opinions or is just not aware of the seriousness of the matter," he said.

It would enable some companies to monopolize the market and cause those depending on imports to make losses, even go bankrupt, he said.

The anti-dumping tax would increase prices of home appliances and products made of steel, "killing their competitiveness" in export markets.

The 18 petitioners said at a media briefing that their only choice would be to cut back production, impacting jobs and tax revenues.

They also feared having to pay penalties for failing to fulfill contracts to supply products.

They plan to file an official objection to the proposal soon.

Economists have said the Vietnam Steel Association should have made sure any lawsuit it files is done with insiders' consensus since the conflict has tainted what seemed to be the country's first effort at fair international trade.

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