20 October 2014
OneSteel's 'dumping' claim sparks inquiry
The Anti-Dumping Commission is investigating a claim by Arrium subsidiary OneSteel that a raft of steel exporters, including South Korea, Thailand and Turkey, is damaging the company by “dumping” cheap product in Australia.
The investigation comes in the wake of Arrium’s $754 million equity raising, undertaken to reduce debt in the face of collapsing iron ore prices and sustained losses in the steel business.
OneSteel lodged an application on August 8 requesting that Bob Baldwin, parliamentary secretary to Minister for Industry Ian Macfarlane, publish a dumping duty notice in respect of steel reinforcing bar (rebar) exported to Australia from South Korea, Malaysia, Singapore, Spain, Taiwan, Thailand and Turkey.
OneSteel alleges the Australian steel industry has “suffered material injury” in the form of lost sales volumes, reduced market share, lower prices and reduced profits due to the export of rebar at prices below actual product value.
OneSteel was spun out of BHP Billiton in 2000 and is Australia’s only producer of rebar. It manufactures rebar products at Whyalla, Laverton and Newcastle.
The size of the Australian rebar market was between 750,000 tonnes and 1 million tonnes in 2013-14.
Arrium’s OneSteel business sold 2.07 million tonnes of steel in 2013-14 and generated a paltry $51 million of earnings (before interest, tax, depreciation and amortisation) on $2.9 billion of revenue.
The anti-dumping claim covers steel products that account for about 30 per cent of OneSteel’s total sales.