BlueScope Steel in anti-dumping threat, ACCC claims

BlueScope lodged an anti-dumping complaint against steelmakers soon after allegedly threatening to use trade rules to fix prices.

A steelworker at the BlueScope Steelworks at Port Kembla in Wollongong. Picture: AAP

BlueScope Steel lodged an anti-dumping complaint against key Korean and Taiwanese steelmakers just 12 months after a key executive allegedly threatened to use Australia’s trade rules against Taiwanese steelmakers in order to fix prices.

The anti-dumping complaint has emerged following a string of allegations raised by the Australian Competition & Consumer Commission in a Federal Court filing against BlueScope and former sales boss Jason Ellis about price fixing in the steel market.

The Australian revealed on Thursday that BlueScope chief Mark Vassella in his previous role as BlueScope’s head of Australia was named as receiving a briefing on alleged plans by Mr Ellis to fix prices in the local steel market.

In documents filed in the Federal Court, the ACCC alleges that Mr Ellis attended a meeting with two other BlueScope representatives at the offices of Taiwanese steelmaker Shang Shing on February 24, 2014.

At the meeting Mr Ellis said BlueScope “wanted to encourage Shang Shing to increase its profits” from the flat steel it sold in Australia and that BlueScope “would provide Shang Shing with pricing information” about flat steel products it made in Australia, according to documents filed with the Federal Court.

The ACCC also claims Mr Ellis told the meeting that “if Shang Shing increased the price at which it sold flat steel products in Australia by reference to that pricing information, it would avoid anti-dumping measures being taken against it”.

Mr Ellis is alleged to have held a similar meeting two days later with another Taiwanese steelmaker, Yieh Phui, offering BlueScope’s price list and making a veiled threat to use anti-dumping rules against the steelmaker.

Mr Ellis allegedly told the Yieh Phui meeting that “BlueScope would be taking anti-dumping measures against any overseas steelmaker” it considered was selling products into Australia too cheaply, the ACCC claimed.

At the same time BlueScope said it would pursue business opportunities in South America “if Yieh Phui raised the price at which it sold flat steel products”, the filing said.

The ACCC does not allege that the companies accepted BlueScope’s offer. Both Mr Ellis and BlueScope have denied any involvement in price fixing. The allegations, which are being pursued by way of a civil hearing, have yet to be tested in court.

It has emerged that a year later BlueScope lodged an anti-dumping application with the federal government against a series of South Korean and Taiwanese steelmakers, arguing price discounting had caused the Australian steel industry to suffer “material injury”.

As part of a major investigation, Australian customs officers visited a number of steelmakers in Taiwan including a site visit to a company called Shang Chen Steel — a major shareholder of Shang Shing steel.

In October 2015, Australia’s Anti-Dumping Commission shelved the investigation, concluding that steel being exported into Australia by the South Korean and Taiwanese producers was not being dumped.

The Australian reported this week that the ACCC’s legal filings also allege Mr Vassella was aware of Mr Ellis’s attempts to encourage the company’s competitors to fix Australian steel prices, and received regular briefings on the scheme’s progress.

While the ACCC does not allege Mr Vassella was directly involved in formulating or carrying out the alleged price-fixing scheme, court documents filed by the regulator say he was briefed on the plans within a month of their launch, and given regular presentations on progress for at least the next six months

In a statement, BlueScope said it would “strongly defend the proceedings”.

“BlueScope has previously conducted an internal investigation in relation to all matters covered in the ACCC’s statement of claim. We remain of the view that neither BlueScope, nor any of its current or former employees referred to in the ACCC’s statement of claim, engaged in cartel conduct, or attempted to engage in such conduct. The ACCC has not alleged that managing director and CEO Mark Vassella was involved in, or directed any employee to engage in, cartel conduct.”