Tariffs of Up to 27.96% Proposed on Chinese Steel Bars... Diverging Interests Between Material and Forging Industries

SeAH Expects Relief from Influx of Low-Cost Chinese Products
Forging Industry Fears Higher Raw Material Costs
Domestic Substitution Capacity and Price Pass-Through Are Key Variables

As plans move forward to impose a provisional anti-dumping tariff of up to 27.96% on Chinese special steel bar products (bar-shaped specialty steel used in automotive and machinery parts), there is a divergence in response between domestic specialty steel manufacturers and forging companies that use these products as raw materials. Material suppliers such as SeAH Besteel and SeAH Changwon Special Steel are expecting a reduction in the inflow of low-priced Chinese imports, while the forging industry is concerned about the increased burden of higher raw material costs.

On September 17, the Trade Commission under the Ministry of Trade, Industry and Energy gave a preliminary positive determination that domestic industry has suffered substantial injury due to Chinese bar products. They decided to recommend to the Minister of Economy and Finance the imposition of provisional anti-dumping duties: 25.08% for Jiangsu Yonggang and its affiliates; 27.96% for Daye Special Steel, Jinteng International and their affiliates; and 27.33% for other suppliers.

The investigation targets alloy steel bars produced by rolling or forging, excluding those made of iron, carbon steel, or stainless steel. These bars are used as raw materials to manufacture parts for automobiles, construction equipment, shipbuilding, bearings, and industrial machinery. SeAH Besteel and SeAH Changwon Special Steel applied for the investigation on February 27.

With this preliminary determination, the domestic specialty steel industry expects relief from price competition with low-priced Chinese imports. According to export and import statistics from Korea Customs Service, the volume of Chinese special steel bars subject to anti-dumping investigation increased about 50% from 450,273 tons in 2022 to 675,824 tons in 2025. This year as well, the number increased by approximately 15% from 167,811 tons in the first quarter to 192,349 tons in the second quarter, with inflows totaling 191,171 tons in July–August.

During the period when the influx of low-priced Chinese products increased, profitability for domestic companies sharply deteriorated. According to SeAH Changwon Special Steel, its consolidated operating profit fell from KRW 125.7 billion in 2022 to KRW 11.4 billion in 2024, before partially recovering to KRW 52.2 billion in 2025. However, compared to 2022, the figure remains about 58% lower. The company explained that while multiple factors played a role, such as sluggish demand in downstream industries, the inflow of low-priced Chinese bar products has put pressure on both domestic selling prices and profitability.

A SeAH official explained that anti-dumping measures on Chinese bar products are necessary to correct the damage low-priced imports have caused to the domestic industry and to maintain the country’s specialty steel production infrastructure. If the price gap between Chinese and domestic products narrows, some demand could shift toward domestic products.

On the other hand, forging companies that process bar products into parts for automobiles, construction machinery, and agricultural machinery are watching raw material price trends closely. According to the Korea Forging Cooperative Association, raw material costs such as bar products account for about 60% of forging manufacturers’ production costs. The association estimates that if anti-dumping duties are imposed, production costs could rise by at least around 15%.

A representative of the Korea Forging Cooperative Association stated, “For companies using Chinese products, the price burden will inevitably rise,” adding, “It is not possible to pass higher raw material prices directly on to the delivery price.”

The association explained that the higher the proportion of Chinese bar products used, such as among construction equipment and agricultural machinery parts manufacturers, the greater the potential impact. In addition to price, the feasibility of securing the required specifications and quantities domestically is being viewed as a key factor when considering switching from Chinese to domestic bars.

However, the specialty steel industry stresses that continued inflow of low-priced products that have been determined as dumped could weaken domestic production capacity. Since bar products are used broadly across core manufacturing industries such as automobiles, shipbuilding, and industrial machinery, they argue that it is necessary to maintain a certain level of supply chain in Korea.

It also remains to be seen how the tariffs will impact the prices of downstream products. The forging industry believes that if domestic companies’ raw material costs rise, it may become difficult to compete with forged or finished products processed in China. On the other hand, the actual increase in imports of Chinese parts will likely depend on the prices and supply capacity of domestic bar products, as well as the sourcing strategies of client companies.

The forgings industry believes that supplementary measures are necessary for raw materials used in export-bound products and for items that cannot be quickly replaced by domestic sources. An association representative said, “Companies will need at least a grace period to switch sourcing for raw materials and devise countermeasures.”

The Trade Commission plans to hold a public hearing in December to listen to feedback from domestic producers and purchasers, and will make a final determination in February next year.

This content was produced with the assistance of AI translation services.