Court not told extent of steel undercutting
WELLINGTON: New Zealand Steel’s lawyers, who are trying to have a government decision not to tax Chinese steel imports overturned by the High Court, would not tell the judge how much the decision had cost the business, but stressed the impact on its profitability.
In July 2017, then commerce and consumer affairs minister Jacqui Dean decided not to impose countervailing duties on imports of galvanised steel coil from China, following an investigation by the Ministry of Business, Innovation and Employment which found that Chinese subsidies on the steel were too small to have injured the domestic industry.
NZ Steel, which is a wholly owned subsidiary of Australia’s Bluescope Steel, lodged an application for judicial review of the former minister’s decision in September 2017. It says Chinese steel flooded the local market and cut into its profits.
At the High Court in Wellington yesterday, Justice Jillian Mallon asked the company to detail the injury it had suffered, and NZ Steel’s lawyer Daniel Kalderimis pointed to the final report from MBIE, which identified evidence of price undercutting by imports from China and resulting price depression and price suppression in the local market.
While the report included margins and prices, these were blanked out in the version publicly available, meaning the judge could not tell the undercutting margin, nor the size of the New Zealand steel industry nor NZ’s Steel’s market share.
However, Mr Kalderimis noted that the unredacted information showed that 55% of imports from the table involved price undercutting, and that NZ Steel’s average selling price dropped by the second quarter of 2016 to 75% of the average selling price in the third quarter of 2011.
‘‘So I’m not going to know that. I’m just — how big is this? How big is this issue, for New Zealand, for New Zealand Steel, for China?’’ the judge asked.
‘‘What we can say is that New Zealand Steel is the only steel producer in New Zealand, and it makes a significant volume of steel,’’ Mr Kalderimis said. ‘‘What is at issue is the profitability and the sustainability of the New Zealand steel industry.’’