South Korea proposes AD duties on Japanese, Chinese HRC with price commitments and quotas

• High price floor, quotas threaten Japan-Korea HRC trade
  
  
• Potential AD expansion to re-exported products raises trade concerns
  
  

Japan Metal Daily: The Korea Trade Commission (KTC) last month recommended to the Ministry of Economy and Finance in South Korea that anti-dumping (AD) measures be imposed on hot-rolled coils (HRC) imported from Japan and China, with price commitments and quantity quotas proposed as conditions for exemption from AD duties.

According to the KTC's proposal, the commission has secured price commitment agreements with three Japanese companies and six Chinese companies, under which AD duties will not be imposed if export prices remain above a specified minimum import price. However, the proposed price level appears to be set significantly higher than current market prices, which could make trade difficult.

In addition, the proposal includes import quantity quotas, which may further restrict shipment volumes and push Japan-South Korea steel trade further away from normalisation.

Under anti-dumping investigations, companies in the targeted countries may negotiate individually with authorities and agree to certain conditions, such as price commitments, to avoid the imposition of duties. In this case, the Japanese companies that have accepted the commitment include Nippon Steel, JFE Steel and Tokyo Steel.

Among Chinese producers, the companies that have accepted the commitment are Baoshan Iron and Steel, Jiangsu Shagang Group, Shougang Jingtang Iron and Steel Union, Benxi Steel, Rizhao Steel and Hebei Yanshan Iron and Steel.

Minimum import price set well above market levels

The exact minimum import price has not been disclosed, although slight price differences appear to exist between Japanese and Chinese suppliers. Market estimates suggest the level is roughly 10% higher than the current HRC market price, placing it in the upper $500/t range. At such price levels, Korean rerollers are expected to find it extremely difficult to conclude import contracts.

Furthermore, the minimum import price will also be reviewed quarterly, meaning it could be adjusted upward if market conditions strengthen. As a result, the pricing threshold is unlikely to decline in the foreseeable future.

Quantity quotas may disadvantage Japan

In addition to the minimum price condition, the proposed AD framework also includes import quantity quotas. While exports above the minimum price may technically be possible, quotas could still restrict shipment volumes.

Quotas are generally calculated based on recent export performance, which could place Japanese suppliers at a disadvantage. Japan's hot-rolled coil exports to South Korea have been declining since 2024. In 2025, exports of ordinary and alloy steel combined fell to 1.26 million tonnes, representing a 33% year-on-year decline and marking the lowest level since 2010, when Hyundai Steel began operating its blast furnace.

Re-exported products currently excluded

Provisional AD measures on Japanese HRC have been in effect since September 2025. However, products intended for re-export are currently excluded from the scope of the measures, allowing Korean buyers to continue contracting shipments through bonded arrangements. As a result, Korean customers have continued to conclude contracts of around 100,000 tonnes per month.

The proposed price commitments and quotas apply only to products sold within South Korea and not to re-exported material. Therefore, current transactions structured as re-export shipments are unlikely to face an immediate impact.

Concerns over possible expansion of AD measures

However, Hyundai Steel, the company that filed the AD complaint, has reportedly expressed dissatisfaction that HRC imports have not significantly declined following the interim measures. The company is said to be calling for re-exported products to also be included within the AD framework.

Japanese suppliers are therefore concerned that the high minimum price requirement and quotas could eventually be extended to re-export shipments as well. If implemented more broadly, the final AD decision could further damage steel trade relations between Japan and South Korea.

Note: This article has been written in accordance with a content exchange agreement between Japan Metal Daily and BigMint.