MANILA – The Department of Trade and Industry (DTI) has notified the World Trade Organization (WTO) of its three preliminary safeguard investigations on imported aluminum and steel products, indicating that the domestic industry has suffered due to a surge in imports.
“The investigation has been initiated to determine whether safeguard measures are warranted,” the Philippines said in its notification to the WTO dated June 22.
The DTI conducted its preliminary investigations on imported aluminum-zinc sheets, coils, and strips; pre-painted galvanized iron and pre-painted aluminum-zinc, and galvanized iron sheets, coils, and strips.
Surge in imported aluminum-zinc sheets, coils, and strips
According to the report published by the DTI, there has been a significant increase in the import of aluminum-zinc sheets, coils, and strips.
In 2014, the country imported only 770 metric tons (MT) of aluminum-zinc sheets, coils, and strips but this surged by 3,090 percent in 2015, 300 percent in 2016, 7 percent in 2017, and 20 percent in 2018.
From the 2014 level, imported aluminum-zinc sheets, coils, and strips in 2018 reached 126,000 MT.
“The share of imports of non-manufacturers to (the) total Philippine market has been increasing during the POI (period of investigation). According to the domestic industry, they imported the said product due to its competitive price, as well as to bring down its production/manufacturing cost,” the DTI report said.
The local market share of importers grew from 1 percent in 2014 to more than 50 percent in 2018.
The investigations also found a continued decline in employment, with jobs falling by 40 percent between 2014 and 2018.
Imported steel increases share in local market
Despite the fluctuating growth trend in the inbound shipment of galvanized iron sheets, coils, and strips, the increased volume of imported products in the local market devoured the market share of domestic producers.
“The condition of (the) competition showed that the market share of domestic products decreased during the POI from 69 percent in 2014 to 9 percent in 2018, as share of imports in the domestic market significantly increased,” the DTI report on the preliminary investigation on imported galvanized iron sheets, coils, and strips said.
Imports of these products climbed to 299,000 MT in 2018 from 18,500 MT in 2014.
Cheap imports affect competitiveness of local products
“According to the domestic industry, sales for locally manufactured pre-painted galvanized iron and pre-painted aluminum-zinc are lost because they cannot compete with the low price of imported products,” the report said.
It added that the average landed cost of imports of these products is lower by about 20 percent than the domestic selling price.
The market share of local manufacturers of pre-painted galvanized iron and pre-painted aluminum-zinc also declined to 29 percent in 2018 from 38 percent in 2015.
China as major source
Most of the imported products came from China, while other sources included South Korea for galvanized iron sheets, coils and strips and Vietnam for pre-painted galvanized iron and pre-painted aluminum-zinc.
As a WTO member, the Philippines may pursue safeguard measures, such as temporary import restrictions on a product if the surge in the inbound shipment of the product causes serious injury to the domestic industry. (PNA)
