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Chinese Accused of Dumping Bad Steel

Thursday, March 19, 2015

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Saudi Arabia's largest producer of coated steel is accusing Chinese competitors of flooding Saudi projects with unsafe products, due to lack of oversight by the Chinese government.

The alleged defects include coatings with 50 times the lead content allowed internationally.

Okaz, an Arabic-language daily newspaper based in Jeddah, quotes Unicoil chairman Raed Al-Ajaji as saying that China exported about 163,000 tonnes of steel to the Kingdom in the first 10 months of 2014—nearly 70 percent of domestic demand.

Photos: Unicoil

Established in 1997, Saudi-based Unicoil was the first company in the Middle East to manufacture pre-painted steel and aluminum coil products.

Steel production in Saudi Arabia, the largest Arab economy, is about 380,000 tonnes per year, with consumption about 255,000 tonnes, Al-Ajaji estimated.

Chinese Steel

Saudi Arabia isn't the only company concerned with Chinese steel. The Wall Street Journal reported Sunday (March 15) that China produces as much steel as the rest of the world combined, causing enormous surpluses that are flooding markets around the world.

China's steel exports increased by 63 percent between January 2014 and January 2015, the Journal reported. Its 2014 production was a 59 percent increase over 2013 and "was the most steel ever exported by any country this century," the news outlet said.

Meanwhile, domestic steel consumption in China has been nearly flat. Exports to the United States have soared, depressing prices. In the United States and Europe, calls for higher steel tariffs are rising.

Violating Specifications

Unicoil (Universal Metal Coating Company Ltd.) was established in 1997 as the first company in the Middle East to manufacture pre-painted steel and aluminum coils, according to its website. Initially a joint venture of a Saudi and Australian firm, the company has been 100 percent Saudi owned since 2004.

UnicoilCoatingProcess

Unicoil shows its products' coating layers. The company says Chinese competitors are flooding Saudi projects with substandard steel that is coated with highly leaded paint.

"The problem is not only in these large supplies, which amount to flooding and dumping, but also in the quality of these products," Al-Ajaji said, according to a report in the English-language Emirates 24/7.

"Our tests showed steel sheets imported from China violate international specifications,” he said.

Thickness, Zinc Lapses

Al-Ajaji says the Chinese steel sheets are labeled with a thickness of 0.32 mlm, but testing showed they were about 0.26 mlm, Okaz reported.

In addition, the zinc used for corrosion protection has 18-30 ml gm per meter, "while the accepted average international rate is around 90 ml gm," the news outlet said.

The largest problem, however, is the coating, Al-Ajaji said.

Unicoil

With five process lines and manufacturing facilities in two cities, Unicoil says its steel and aluminum coil products dominate the Middle East/North African market.

“The most shocking result in the tests was that the coating of most Chinese steel products supplied to the Saudi market contained very high levels of lead, which is internationally banned," he told the news outlet.

"The tests showed that the lead levels in some samples were as high as 50 times the level permitted internationally."

Overall, he said, "A large part of the steel sheets exported by that country to the Saudi market are bad and adulterated."

   

Tagged categories: Coil Coatings; Construction; EMEA (Europe, Middle East and Africa); Health and safety; Lead; Market; Metal coatings; Protective Coatings; Quality Control; Steel

Comment from Simon Hope, (3/19/2015, 6:09 AM)

Why does this not surprise me, having lived in China there is a philosophy of maximising profit by selling the cheapest rubbish you can make for the highest price. the arguement being that in Chinea you set up in one village (population around 1,000,000) keep on ripping people off as long as you can then move on to another village, there being so many people in China that there will always some one who doest know about you! This is a basic problem that cuts across everything and seems to be the whole ethos of there Communist system run on a Capitalist philosophy....serves you right if you think you are getting a bargain!! You are probably getting more than you bargained for!


Comment from Roger Moyer, (3/19/2015, 10:42 AM)

Reads a lot like Lumber Liqudators issue and why do we continue to do business with China.


Comment from M. Halliwell, (3/19/2015, 11:27 AM)

Roger...for the same reason that Simon sees the landmines in safety: money. Chinese companies flood the market with cheap, out-of-spec steel and folks buy it because it looks better at the bottom line tally. Too much greed, too little integrity these days.


Comment from Mark Anater, (3/19/2015, 12:22 PM)

If you want to know what libertarian economics really look like, read this article. Free market absolutism is no guarantee of good quality or honest business practices no matter how much the Randians insist.


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