The South Korean government intends to increase domestic steel demand by 510,000 tons per year to fill the gap created by the EU's reduction of duty-free import quotas in the country.
Minister of Trade, Industry and Resources Kim Jeong-kwan told a meeting on July 1 how the country would do "everything possible" to mitigate the effects of the European Commission's new steel regulations.
The EU's new trade protection regime for regulating steel production, which was put into effect that day, reduced the bloc's annual total tariff quotas (TRQs) by about 47% to 18.35 million tonnes. Minister Kim said at the meeting that South Korea's customs duties would be reduced by 19.7%, from 2.58 million tons to 2.07 million tons. Nevertheless, prices for some product categories in the EU decreased significantly, including hot-rolled sheets and strips made of non-alloyed materials and other 1A alloys - by 39%, to 461,830 tons; and cold-rolled sheets made of non-alloyed materials and other alloys - by 34%, to 254,611 tons.
Access to new quotas for the "overflow" of products provided for by the EU Steel Production Regulations for countries that have signed a free trade agreement (FTTA) may mitigate South Korea's limited duty-free access. The country will compete with other Free Trade Area countries on a first-come, first-served basis for access to these additional volumes. However, the reduced tariffs are an undesirable obstacle to duty-free trade with the EU.
Steps to strengthen South Korea's steel industry
Minister Kim said that the Ministries of the Korean government intend to boost domestic steel demand by expanding supply chain cooperation between the steel industry and key refining sectors such as shipbuilding, defense, and renewable energy.
This promise was made after the South Korean government's Special Law on the Steel Industry came into force in June. The initiative, first announced in December last year, provides for the allocation of 570 billion Korean won to support the steel industry. The sector. About 400 billion Won has been allocated to support steel exports. The law also contributed to the reduction of steel production capacity and the transition to high-value-added products, especially for the country's automotive and shipbuilding sectors.
The Korean government also confirmed that it pays special attention to strengthening the country's trade protection, in particular, rules of origin to combat circumvention measures. Anti-dumping measures are already supporting steel prices in South Korea. The cost of all flat rolled steel, estimated
