Union worried about cheap Chinese steel

Union worried about cheap Chinese steel

The Prime Minister is dismissing allegations China is threatening to retaliate if an investigation continues into its steel imports.

But the E tū union says New Zealand's steel industry and some major projects could suffer if the imports continue.

China is New Zealand's biggest trading partner but concerns over the quality of Chinese steel imports and an application to the Ministry of Business, Innovation and Employment to investigate could see the relationship in serious trouble.

"Our exports are flowing across the border into China. I regularly see the Chinese leadership and the Chinese ambassador has my phone number if he wants to give me a call. None of those things have happened," says Mr Key.

The Government is seeking advice from officials and is keen to talk to China.

The Chinese Ambassador to New Zealand, Wang Lutong, is also echoing that sentiment, saying there is no problem with his country's steel.

"What I can say is that the quality of the steel imported from China has no issue," he told The Nation at the weekend.

Trade Minister Todd McClay says he's asked the Ministry of Foreign Affairs and Trade to talk to the Chinese Embassy on Monday morning to seek assurances "on a competition issue".

Media reports emerged about the potential dispute while Mr McClay was en-route to Indonesia.

He wouldn't comment on whether MBIE was investigating, saying there were processes to follow.

"The rules around that in New Zealand legislation and the [World Trade Organisation] say that if a complaint has been made, the regulator - MBIE - has to work through that before anything can be made public," says Mr McClay.

"If they decide to launch an investigation, that's when it becomes public."

He was not worried about steel arriving from China and he wasn't sure where the reports had come from.

"It is fair to say with all countries in the world we trade with, from time to time there are important issues which are raised. For any country or company that has an issue with competition there are appropriate ways to raise this and market economies talk to each other."

Mr McClay was in China last week for a bilateral meeting with his counterpart and no issue of competition was raised.

But E tū industry coordinator Joe Gallagher says he's been working with New Zealand's steel industry for the past 18 months and they've been "under significant pressure" over the price of hot roll coil and dropping iron ore prices.

"[They're also] struggling with the importation of what I believe is cheap Chinese steel," he told Paul Henry on Monday.

He says, despite Mr Key and Mr Lutong's assurances, there's evidence overseas China is flooding the market with cheap steel.

"China has an excess of steel they're trying to dump on the world market to get rid of it because their economy has slowed down so they don't need it so they're trying to shift it to other jurisdictions."

He says steel is coming into New Zealand unchecked and the union is concerned at the lack of quality control.

There's already been repercussions in the $450 million Huntly bypass project, with 1600 tonnes of Chinese steel found to be too weak for four bridges earlier this year.

Similar instances could happen in the Christchurch rebuild too, Mr Gallagher believes.

"As we seek to rebuild Christchurch we need to make sure that the steel we're putting into these big projects is going to hold up."

The cheaper Chinese steel could also be damaging to New Zealand's economy and workers, with the highly unionised steel industry unable to compete on price.

Mr Gallagher says workers in Waikato are worried about their jobs.

"It's really worrying times for those workers. If we were to lose the steel mill, it's 1 percent of GDP, it's $138 million to the Waikato community - so to lose a mill like that would be a major blow to our economy."