Japan's Preliminary Anti-Dumping Determination Pushes the Global Hot-Dip Galvanized Steel Sheets and Strips Market Toward Regional Competition
On July 24, 2026, Japan's Ministry of Finance and Ministry of Economy, Trade and Industry issued an affirmative preliminary anti-dumping determination on certain hot-dip galvanized steel coil, sheet and strip originating in South Korea and China. The authorities preliminarily found that the products concerned were being dumped and were causing material injury to the Japanese domestic industry. The petition was filed in April 2025 by Nippon Steel, Nippon Steel Coated Sheet, Kobe Steel and YODOKO, and the Japanese government initiated the investigation in August 2025. The preliminary dumping margins were determined at 63.95%-68.67% for relevant Chinese suppliers and 32.49%-42.69% for relevant South Korean suppliers.
It is important to note that the preliminarily determined dumping margins are not equivalent to anti-dumping duty rates already imposed. To date, Japan has not announced either provisional or definitive anti-dumping duties in this case. Instead, the investigation period has been extended by four months to December 12, 2026, allowing the authorities to continue reviewing evidence and submissions from interested parties. Whether duties will ultimately be imposed, and at what rates, remains subject to the final determination.
Source: Ministry of Finance of Japan; Ministry of Economy, Trade and Industry; compiled by LP Information
1.1 Products Covered Represent Only Part of the Global Hot-Dip Galvanized Steel Market
Japan's investigation primarily covers certain hot-dip galvanized flat-rolled steel products classified under HS 7210.49, 7212.30, 7225.92 and 7226.99. The products include coil, strip and sheet and are mainly used in guardrails, housing, fencing and components for household electrical appliances. However, the scope of the Japanese investigation does not encompass all hot-dip galvanized steel sheet and strip products.
Japan explicitly excluded corrugated products, galvannealed products with an iron content of at least 7.0% of the coating weight, and certain high-aluminum-magnesium and aluminum-magnesium-nickel coated products. Accordingly, conventional GI products have a relatively high degree of overlap with the products concerned, while a large proportion of automotive GA products, zinc-aluminum-magnesium high-corrosion-resistance products and other specialty coated materials fall outside the core scope of the case. Japan's preliminary determination should therefore not be interpreted as a restriction on the entire global hot-dip galvanized steel sheet and strip market. Its direct effect is limited to products originating in China or South Korea, entering the Japanese market and meeting the specified requirements for material, coating and product form.
1.2 Global Market Maintains Moderate Growth, with Structural Upgrading More Important than Volume Expansion
According to the latest research, the global hot-dip galvanized steel sheet and strip market generated approximately US$98.9 billion in revenue in 2025, is estimated at around US$102.2 billion in 2026, and is projected to reach US$124.1 billion by 2032, representing a compound annual growth rate of approximately 3.29% from 2025 to 2032.
By product form, hot-dip galvanized steel strip accounted for 82.35% of global market revenue in 2025 and is expected to increase to 83.80% by 2032, contributing approximately 89.50% of incremental market revenue. The continued rise in the strip share is primarily attributable to the widespread use of coil and slit coil in continuous stamping, roll forming, shearing and bending for automotive stampings, appliance housings, HVAC ductwork, electrical enclosures and industrial structural components. These forms generally offer higher production efficiency, material utilization and compatibility with automated processing than cut-to-length sheet. At the same time, the revenue share of cold-rolled-substrate galvanized products is projected to rise from 84.30% to 85.60%, reflecting a further shift in demand toward products with tighter flatness control, cleaner surfaces, more uniform coating, better deep-drawing performance and greater paintability.
From the perspective of downstream applications, construction and infrastructure remain the largest source of demand for hot-dip galvanized steel sheet and strip worldwide, accounting for approximately 38.20% of revenue in 2025. The segment is expected to retain its leading position in 2032, although its share is projected to decline to 35.80%. This does not indicate an absolute contraction in construction demand, but rather slower growth than in automotive, HVAC and industrial equipment applications. Road guardrails, building envelopes, warehousing facilities, agricultural facilities and the renewal of public infrastructure will continue to support stable consumption. However, slower construction investment in mature markets, real-estate cyclicality and price competition in standard construction-grade products will constrain revenue growth. Automotive demand, supported by corrosion protection, lightweighting, greater use of high-strength steel and upgrades in coating and surface quality, is projected to increase from 27.85% to 30.10% of market revenue. With an estimated CAGR of approximately 4.44% from 2025 to 2032, automotive is expected to become the largest source of incremental market revenue. HVAC and ductwork, electrical equipment and general industrial equipment will also benefit from demand associated with data centers, commercial buildings, industrial automation, power infrastructure and equipment replacement, with growth expected to exceed the overall market average.
From a market-impact perspective, Japan's preliminary anti-dumping determination will not directly reduce the actual consumption of hot-dip galvanized steel in construction, automotive, household appliances or industrial equipment, nor will it alter the fundamental global demand drivers of existing-infrastructure renewal, automotive material upgrading and industrial investment. Its effects are more concentrated on the supply and trade sides. If definitive anti-dumping measures are imposed, the landed cost and quotation uncertainty of standard GI products from China and South Korea entering Japan will increase. Japanese procurement may partly shift to domestic mills, Taiwan or other third-country suppliers, or complete supplier substitution through renegotiation, specification adjustments and longer qualification periods. At the same time, Chinese and South Korean products originally intended for Japan may be redirected to Southeast Asia, the Middle East, Latin America and other markets, increasing supply pressure and price competition in those regions. The case is therefore more likely to change supply sources, regional pricing, trade flows and supplier shares in Japan and Asia. Its direct impact will be concentrated on price-sensitive, relatively standardized construction-grade and general industrial GI products, while the effect on automotive-grade products with higher qualification barriers, and on certain GA and specialty coated products explicitly excluded from the case, will be comparatively limited.
1.3 Core Logic Behind Japan's Preliminary Anti-Dumping Determination: Not Simply Cost Competition, but Price-Based Substitution During Demand Contraction
Source: Interim Report of Japan's Anti-Dumping Investigation; compiled by LP Information
From an industry-analysis perspective, the central issue behind Japan's affirmative preliminary determination on hot-dip galvanized steel sheet and strip from China and South Korea is not simply that Japanese mills have higher costs while Chinese and South Korean mills have lower costs. Rather, low-priced imports continued to expand or maintain a high market share even as Japanese demand contracted, placing visible pressure on the sales volumes, pricing power and profitability of domestic producers. Large Chinese and South Korean steelmakers generally operate relatively integrated steelmaking, hot-rolling, cold-rolling and continuous galvanizing systems and may benefit from advantages in line scale, raw-material coordination, fixed-cost absorption, capacity utilization and mass production of standard construction-grade and appliance-grade products. Differences in energy, labor, depreciation, environmental and financing conditions may also support more competitive export quotations. These factors explain the possible industrial basis for low pricing, but lower costs or higher production efficiency do not in themselves constitute dumping.
An anti-dumping investigation must distinguish between two different price comparisons. First, Chinese and South Korean products were consistently sold in Japan at prices approximately 10%-20% below comparable Japanese products. This price gap is primarily relevant to determining whether imports caused price undercutting or price suppression for Japanese mills and influenced downstream purchasing decisions. Second, dumping in the legal sense requires a comparison between the export price to Japan and the normal value determined by the investigating authority. In other words, an imported product being cheaper than a Japanese product does not automatically constitute dumping. However, in a market where products are highly substitutable and customers are price-sensitive, sustained low pricing can provide important evidence of injury to the domestic industry. The preliminarily determined dumping margins of 63.95%-68.67% for Chinese companies should not be interpreted to mean that Chinese production costs are more than 60% below those in Japan, or that Chinese products are sold in Japan at prices more than 60% below Japanese products. The margins are also affected by the methodology used to calculate normal value, product matching, expense adjustments and the extent of company cooperation in the investigation.
A more important feature of this case is the divergence between import growth and the change in Japanese demand. During FY2022-FY2024, demand for the products concerned in Japan declined overall, while imports from China and South Korea increased from 518,293 metric tons to 638,905 metric tons, an aggregate increase of approximately 23.3%. In FY2024, Chinese and South Korean products together represented 89.0% of Japan's total imports of the relevant products. Had the increase occurred during a period of rapid market expansion, it might have represented a normal supplement to insufficient domestic supply. Instead, import volumes continued to rise despite falling demand, indicating that the growth was driven more by substitution for Japanese supply than by incremental demand. This divergence is an important part of the injury analysis: Chinese and South Korean products did not merely grow alongside the market, but gained share while the market was contracting.
Standard construction-grade, appliance-grade and general industrial GI products are relatively standardized, and purchasing decisions generally place significant weight on price, delivery lead time and supply stability. When import quotations remain 10%-20% below Japanese products over an extended period, downstream customers may not only increase direct import purchases but also use import prices as a benchmark in renegotiations with Japanese mills. Japanese producers then face two choices: reduce quotations or narrow intended price increases to retain orders, or maintain existing prices and accept the risk of customers switching to imports. Low-priced imports therefore create both volume substitution and price transmission. Even where customers continue to buy Japanese products, import quotations may still compress domestic producers' margins and limit their ability to pass through costs.
The investigation results show that from FY2022 to FY2024, the domestic sales volume index for the Japanese like product declined by 21 points, the market-share index fell by 13 points and the production index decreased by 16 points. Steelmaking is highly fixed-cost-intensive, and continuous galvanizing lines must maintain a certain operating rate to absorb equipment depreciation, labor, maintenance and energy costs efficiently. Lower sales volumes increase unit fixed costs, while simultaneous pricing pressure generally causes profit to decline faster than revenue. The direct objective of the Japanese petitioners was therefore not merely to reduce import volumes, but also to weaken the influence of low-priced imports on domestic pricing and restore the pricing power and operating load of local production lines.
The pressure on the Japanese industry cannot, of course, be attributed entirely to Chinese and South Korean imports. Higher construction-material and labor costs, project delays, longer construction cycles and weakness in certain end markets also reduced Japanese demand for galvanized steel. Production-line adjustments, product-mix upgrades and changes in capital expenditure at some Japanese producers likewise affected production and operating indicators. However, these factors do not fully explain why imports from China and South Korea grew rapidly and continued to gain market share while total demand declined. Imports from third countries were also substantially smaller. Viewed together, the changes in import volumes, price gaps, market shares and Japanese operating indicators suggest that low-priced imports of the products concerned were at least an important incremental source of injury to the Japanese domestic industry, although not the only cause.
Overall, Japan's preliminary determination reflects a complete chain: cost and scale advantages support competitive quotations; import prices remain below Japanese domestic prices; imports continue to expand their share during a period of demand contraction; Japanese mills lose sales volume and pricing power; and the investigating authority subsequently finds export prices below normal value. The case is therefore neither simply a matter of cost competition nor adequately described as trade protectionism alone. It results from the combined effects of industrial competition, changing market demand and trade-remedy rules. If definitive anti-dumping measures are imposed, the most immediate change may not be lower Japanese end-market demand, but higher costs and uncertainty for standard Chinese and South Korean GI products entering Japan. Japanese procurement may partly shift to domestic or third-country suppliers, while products previously exported to Japan may be redirected to other Asian, Middle Eastern or Latin American markets. Competition will consequently move beyond export pricing toward regional production capacity, local inventory, customer qualification, origin compliance and cross-regional order allocation capabilities.
1.4 Competition Shifts from Export Pricing to Regional Delivery Capabilities
Major global producers of hot-dip galvanized steel sheet and strip include ArcelorMittal, China Baowu, Nippon Steel, POSCO, JFE Steel, Nucor, Hyundai Steel, HBIS and Angang. The impact of Japan's preliminary determination on these companies depends not on overall group size, but on whether they export GI products covered by the investigation from China or South Korea to Japan.
Angang, Hunan Valin Lianyuan Iron and Steel, POSCO and KG Dongbu Steel, which were selected for individual examination, as well as other Chinese and South Korean suppliers assigned the relevant dumping margins, face more direct quotation and order uncertainty. Pricing pressure on standard GI products supplied by Japanese domestic producers may ease temporarily, but actual order gains will remain constrained by Japanese demand, capacity, costs and customer qualification requirements.
Third-country suppliers may capture part of the procurement shift. In FY2024, Japan imported approximately 79,239 metric tons of the relevant products from third countries, of which Taiwan accounted for 97.1%, indicating an established supply base in the Japanese market. However, third-country product pricing, specification coverage, qualification lead times and available capacity - rather than origin alone - will determine whether these suppliers can replace existing Chinese and South Korean imports.
1.5 From Global Low-Cost Supply to Regionalized and Differentiated Competition
If Japan ultimately imposes anti-dumping measures, the near-term effect may be to increase the cost of standard GI products from China and South Korea entering the Japanese market, encouraging Japanese importers to increase domestic procurement, source from third countries or renegotiate long-term contracts. Some Chinese and South Korean suppliers may redirect products toward Southeast Asia, the Middle East, Latin America or other Asian markets, increasing price competition and trade-remedy risk in those regions.
Over the longer term, competition may shift further away from cost and export quotations alone toward overseas and regional production capacity, local inventory and delivery systems, customer qualification and long-term supply relationships, automotive-grade and specialty-surface product capabilities, origin and trade-compliance management, and the ability to allocate products and orders across markets. Price competition is more direct for standard construction-grade and general industrial GI products, which are consequently more exposed to trade measures. Automotive-grade GA, high-corrosion-resistance zinc-alloy coated products and other specialty products depend more heavily on technology, qualification and customer cooperation, and their market dynamics should not be equated with those of commodity-grade products.
Japan's preliminary determination will not fundamentally alter the growth direction of the global hot-dip galvanized steel sheet and strip market, but it clearly reflects a broader trend: the global steel market is moving away from concentrated cross-regional supply of low-cost products toward regional manufacturing, localized qualification and differentiated product competition.
