Lawyers for New Zealand Steel are reportedly trying to have a Government decision not to tax Chinese steel imports overturned by the High Court.
According to the website Sharechat the legal representatives would not tell the judge how much the decision had cost the steelmaker’s business, though stressed there was impact on its profitability.
Citing a report by BusinessDesk, Sharechat said that 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. This followed an investigation by the Ministry of Business, Innovation and Employment (MBIE) that found Chinese subsidies on the steel were too small to have injured the domestic industry.
NZ Steel, which is a wholly-owned subsidiary of Melbourne-based BlueScope Steel Ltd (ASX: BSL), lodged an application for judicial review of the former minister's decision in September 2017.
That application reportedly said Chinese steel flooded the local market and cut into its profits.
Justice Jillian Mallon asked the company to detail the injury it has suffered, and NZ Steel's lawyer Daniel Kalderimis reportedly 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 publically 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, Kalderimis noted that the un-redacted 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.
The judge asked how big is this issue, for New Zealand, for New Zealand Steel?
“What we can say is that New Zealand Steel is the only steel producer in NZ, and it makes a significant volume of steel,” Kalderimis responded.
“What is at issue is the profitability and the sustainability of the New Zealand steel industry.”
NZ Steel wants the court to quash the decision and have it be reconsidered by going back and re-investigating the matter. The hearing is set down for the rest of this week.
Sources: sharechat.co.nz; businessdesk.co.nz