BEIJING Baoshan Iron and Steel Corp. (BAOSTEEL), Wuhan Iron and Steel Corp. and other large Chinese steel producers denied accusations they had been dumping their products in the U.S. market, AFP quoted state media as saying on Sunday.
In a bid to avoid paying heavy punitive duties, the companies met in Beijing on Friday to determine ways to prove their innocence to the U.S. International Trade Commission (ITC), which is currently looking into the charges, the China Daily Business weekly reported.
"The procedure of investigation will stop when the investigated is able to prove that dumping does not take place," said Shi Jun, an executive at Wuhan Iron and Steel. "To act sooner is better than later as it saves time, energy and money." China is one of 11 steel exporting countries that were targeted in a complaint filed by nine U.S. companies and the independent steelworkers union earlier this month.
They charged that hot-rolled steel from these countries had either been dumped -- sold at less than fair market value -- or had benefited from unfair government subsidies.
The ITC, a quasi-judicial agency which investigates allegations of unfair trade practices, is expected to make a preliminary determination on the complaint by December 28 and has asked six Chinese steel producers to respond to the charges.
At least two of the companies -- Anyang Iron and Steel and Laiwu Iron and Steel -- are likely to get off the hook, as customs record show they did not sell hot-rolled steel products in the United States during the investigated period, the paper said.
But the four other companies could be at a disadvantage if they want to prove they do not sell their steel products at unreasonably low prices compared with production costs.
This is because antidumping investigators frequently treat China as a non-market economy and therefore do not take Chinese production cost figures at face value.
Instead, they substitute data from comparable market economies to get an approximate idea of Chinese costs.
The problem is that investigators often arrive at production cost figures that are higher than the real Chinese production costs, making the country come across as a dumper, the paper said.
BAOSTEEL, whose exports of hot-rolled steel products make up about two percent of its total sales, told the paper it does not really need to sell its products abroad.
China's domestic demand for hot-rolled steel products is huge and producers can fetch better prices at home than abroad, a BAOSTEEL executive said according to the paper.
The U.S. companies filing the complaint earlier this month said that from January to August this year, unfairly traded imports from the 11 countries had increased more than 111 percent over the same period in 1999 and more than 400 percent over 1998.
As a result, they said, hot-rolled steel prices had fallen 47 percent in the last six months, imperiling the future of the U.S. industry.
U.S. steelmakers in the past several years have lobbied hard for sanctions and restraints against various categories of imported steel and succeeded in getting duties imposed on Japanese hot-rolled steel in June 1999.
Import suspension agreements have also been worked out with Brazil and Russia.