The Japanese government needs to impose an anti-dumping tariff on Chinese steel exports to protect the domestic industry, said Nippon Steel Corp., the world’s fourth largest steelmaker.

The company is lobbying the government to take protective measures alongside other steelmakers, amid concerns that exports from China will increase further, said Takahiro Mori, executive vice president of the Japanese mill in an interview this week. 

China’s steel exports surged this year to their highest since 2016, as domestic demand slumped due to the protracted property downturn. Fears that other countries are becoming a dumping ground for China’s excess product has led to increased trade measures against the world’s biggest producer.

A lot of other countries, including in Europe, the US and South Korea have introduced defensive measures, which means that “exports will pour into Japan if it’s the only one without them,” Mori said.

Steel mills globally, including those in China, are feeling the pressure of the market’s downturn. The world’s biggest steel producer China Baowu Steel Group Corp. earlier this month cautioned that the Chinese steel sector is in a “harsh winter” that may be more challenging than the conditions seen in 2008 and 2015. Nippon Steel is also bracing for what it calls an “unprecedentedly harsh business environment.”

Nippon Steel exited a joint venture with Baowu’s listed unit Baoshan Iron & Steel Co. late last month. The Japanese firm will make decisions on other joint ventures it has in China on a case-by-case basis, Mori said, adding that the firm’s strategy is to expand investment in the US, India and the Asean region instead. 

The company is positive it can close its acquisition of US Steel Corp., a $14.1 billion deal that has become politically sensitive during this year’s US presidential race. 

“If it wasn’t an election year, this deal would have closed long ago,” Mori said, adding that he is planning to visit the US and meet stakeholders next month. 

The executive recalled that he spoke with Minnesota Governor Tim Walz before he was appointed as Kamala Harris’ vice presidential candidate, at an opening ceremony for a pellet production facility in the state in May. The governor was “very positive” about Nippon Steel’s investment in US Steel, Mori said. 

  - Bloomberg