Steelmaking auxiliary material manufacturers are expressing reluctance over the government's push to lower the tariff on steel auxiliary materials. The steel industry argues that import tariffs on auxiliary materials should be waived to cope with a sluggish market and U.S. steel tariffs of up to 50%, but if tariffs are waived, companies that manufacture auxiliary materials domestically will inevitably be hit.
On the 21st, according to the steel industry and others, raw material producers recently conveyed to the Ministry of Trade, Industry and Energy their opposition to applying a 0% quota tariff to imported steel auxiliary materials. A quota tariff is a system that adjusts the tariff on specific import items according to external variables. Last month, the ministry announced the items applying for quota tariff application, including 17 types of steel auxiliary materials and equipment, and is collecting feedback from stakeholders. Steel auxiliary materials are additives used in the steelmaking process to adjust the composition and properties of iron and remove impurities.
A representative item that drew opposition is antimonide. Antimony is used in the production of hot-rolled alloy steel. In Korea, Korea Zinc is the only producer of antimony, and even now its price is higher than Chinese products. The price of Chinese antimony ingots is known to be about 60% of domestic products.
In addition to antimony, a significant number of steel auxiliary material items for which the ministry announced quota tariff applications are produced domestically. Ferronickel used in stainless steel production is made by SNNC, a subsidiary of POSCO, and forged rolling rolls used in manufacturing special steel for automobiles are manufactured and supplied by Doosan Enerbility.
Ferrotitanium, used as a deoxidizer and cleaning agent in the hot-rolling process, is produced by Donga Special Metal, and limestone for steelmaking, used to remove impurities during steel production, is sourced from raw material at the Samcheok mine and produced by Ssangyong C&E. Fluorite, used for similar purposes, is also being developed by companies including FOOSUNG Co. and BGF Eco-Materials.
The steel industry says that since exports to the United States of downstream products using these auxiliary materials have plummeted following the application of U.S. steel tariffs, a 0% quota tariff should be applied. According to the ministry, exports to the United States of hot-rolled, cold-rolled, and stainless cold-rolled products in July–August fell by more than 50% from a year earlier.
The ministry plans to submit the list of items for quota tariff application to the Ministry of Economy and Finance, reflecting stakeholder feedback. The ministry estimates that applying a 0% quota tariff to steel auxiliary materials would provide tariff support worth about 29.6 billion won. A ministry official said, "We are proceeding with the matter by holding briefings for stakeholders."