Steelmakers ask gov't to probe substandard products

Downstream steel producers have asked government to look into the proliferation of substandard steel products in the market, saying that the industry is being hurt by unfair competition from lower-priced products that do not meet standards.

The alarm was raised by downstream steel producers during a recent multi-sectoral meeting between industry leaders and officials of the Department of Trade and Industry and its attached agencies.

During the meeting, Steel Corp. president Alberto Uy said the market was being flooded with substandard products, creating an unfair advantage over domestic producers that produce quality steel products.

Uy said there was particular concern over imported flat products such as galvanized iron sheets which were usually not up to the standard gauge. "They are cheaper and consumers won't know the difference," he said.

According to local steel producers, the same problem exists in the so-called long products or rebars although the substandard products in this segment are most domestically-produced.

However, downstream producers said the concern was more about imported flat products because these were higher value products and the competing substandard products were imported.

This is particularly painful for local producers such as Puyat Steel, Jacinto Steel and Philippine Steel Corp. who said they were up to standards and, therefore, could not price their products lower to compete with substandard imports.

Substandard rebars, on the other hand, also pose dangers, especially when safety standards are concerned, since these products are being used mainly for structural support in building construction as well as infrastructure projects.

Industry leaders asked the DTI and Bureau of Standards to look into the problem and come up with an improved monitoring policy to address the problem to prevent more losses to the industry.

According to downstream producers, if substandard imports are able to get past the Bureau of Customs, there should be market mechanisms to prevent these products from proliferating.

At the same meeting, the iron and steel industry also requested the DTI to extend the imposition of the anti-dumping bond on imported Russian billets despite the closure of the National Steel Corp.

Local steel billet makers said that although the NSC was closed, a domestic steel billet industry still exists since there were still a number of plants producing steel billets used for downstream steel products from flats to long rebars.

However, the DTI held off its decision pending discussions with the Cabinet committee on Tariffs and Related Matters which has the final say on policies that would potentially affect the country's commitments to the World Trade Organization.