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The Department of Trade and Industry has terminated preliminary investigations on safeguard measures for aluminum zinc and galvanized irons imports
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Sonic Steel Industries withdrew its application for preliminary investigation after DTI banned the manufacture of certain products upon which the company’s application was based
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DTI also dismissed the preliminary safeguard measures investigation requested by Puyat Steel Corp on GI sheets, coils and strips as well as pre-painted galvanized iron and pre-painted aluminum zinc imports
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DTI found Puyat Steel’s capacity to supply the Philippine market insufficient and safeguard measures would only jack up steel prices
The Department of Trade and Industry (DTI) terminated preliminary investigations on safeguard measures for aluminum zinc (GL) and galvanized irons (GI) imports after the petitioner withdrew its application for a probe.
In a notice dated September 24, DTI announced it was dropping the investigation of a case covering the possibility of imposing safeguard measures on imports of GL sheets and coils. Petitioner Sonic Steel Industries, Inc. withdrew its petition following the DTI ban on manufacture and sale of all hot-dip metallic-coated and pre-painted galvanized steel coils and sheets for roofing and general applications. The ban rendered Sonic Steel’s petition moot.
In another decision, DTI Department Order (DO) No. 21-06, also dated September 24, dismissed the safeguard measures investigation on GI sheets, coils and strips, as well as pre-painted galvanized iron (PPGI) and pre-painted aluminum zinc (PPGL), including other coated products and painted strips imports, sought by Puyat Steel Corp.
DTI determined Puyat Steel’s petition as “not in the public’s interest” since the company has no sufficient capacity to supply the domestic market.
READ: DTI investigates safeguard measures on steel products
DTI in June 2020 initiated preliminary safeguard measures investigations on the importation of GL and GI after Sonic Steel and Puyat Steel Corp alleged there was an increase in imports that contributed to serious injury of the local industry.
Sonic Steel in 2019 sought the initiation of a preliminary investigation on the importation of GL sheets, coils and strips, alleging the increased imports seriously injured the local industry. Sonic Steel is the country’s sole domestic manufacturer of GL sheets.
A separate application was submitted by Puyat Steel Corp. in 2019 for a preliminary safeguard measures investigation on the importation of GI sheets, coils and strips. Puyat Steel accounts for 82% of the total domestic production of GI.
In additional applications in 2019, each company requested a preliminary safeguard measures investigation on the importation of PPGI and PPGL. Sonic Steel and Puyat Steel account for 70% of the total domestic production of PPGL and PPGI.
DTI is mandated by Republic Act No. 8800 (Safeguard Measures Act) to protect the domestic industry from serious injury caused by a surge in imports.
In the September 24 notice, DTI said it received on January 14, 2021 a notice of withdrawal from Sonic Steel of its applications for safeguard measures on GI, GL, and PPGI and PPGL.
DTI said the application was withdrawn with the issuance of DTI DAO 20-10, which effectively prohibits the manufacture and sale of all hot-dip metallic-coated and pre-painted galvanized steel coils and sheets for roofing and general applications.
DAO 20-10 issued last year mandates that all hot-dip metallic-coated and pre-painted galvanized steel coils and sheets for roofing and general applications should have a minimum total coated thickness of 0.4 millimeters.
DTI said Sonic Steel claimed the bulk of the surge in importations on which the safeguard measures applications were hinged on were GI, GL, and PPGI-PPGL products which are below 0.4 mm.
“Thus, the applications for safeguard measure will become an exercise in futility, if not moot and academic, since these items are no longer allowed to be manufactured,” DTI said.
DAO 21-06, meanwhile, said the safeguard measures investigation pushed by Puyat Steel on GI sheets, coils and strips, and PPGI and PPGL was dismissed after DTI determined that petitioner’s application “at this time is not in the public interest.”
DTI said “given the existing capacity of the petitioner versus the demand, the petitioner’s capacity to manufacture the products under protest, cannot sufficiently supply the Philippine market.”
The agency said imposing safeguard measures “at this time and under these circumstances can lead to a price increase in GI sheets, coils and strips as well as to PPGI and PPGL including other coated products and painted strips.”
DTI further explained: “It can also cause a chilling effect on importers which reduce the level of imports of the said products and consequently lead to supply shortages. These could have detrimental effects on the construction and housing sector that use these products. Considering further that the demand for housing currently exceeds supply, import restrictions on GI sheets, coils and strips as well as to PPGI and PPGL including other coated products and painted strips will drive up the costs of these products and consequently the costs of building residential homes.”
