April 29, 2016 / 9:02 AM / in 2 years

China's Baosteel Group says U.S. Steel accusations groundless

SHANGHAI/MANILA (Reuters) - China’s Baosteel Group said on Friday that accusations by U.S. Steel Corp against the company, including that it had stolen commercial secrets, were groundless and vowed to protect its legal rights.

A woman is reflected on a wall with a company logo of Baosteel Group at an office in Shanghai, July 24, 2011. REUTERS/Stringer

China’s second-biggest steelmaker and the world’s fourth is the first Chinese steel producer to respond to U.S. Steel, which launched a campaign this week to halt imports from China.

“In particular, the charges claiming that Baosteel stole commercial secrets from U.S. Steel is rootless speculation and subjective assumption, and could even be described as an absurd statement,” Baosteel said in an emailed statement.

“Baosteel has not and will never steal to obtain technology,” the company said, adding that it had consistently focused on original research and technology improvement.

“The charges in the application violate the spirit of justice and fairness and were also disrespectful and besmirching to Baosteel and its research staff,” it said.

“Baosteel will protect its legal rights in accordance with related international regulations and laws.”

U.S. Steel on Tuesday filed a complaint with the International Trade Commission (ITC), calling on regulators to investigate dozens of Chinese producers and their distributors for allegedly conspiring to fix prices, stealing trade secrets and circumventing trade duties by false labeling.

China’s commerce ministry on Wednesday urged the ITC to reject U.S. Steel’s call, saying there was “no factual basis” for intellectual property disputes over China’s steel exports to the United States.

In a statement later on Friday, the China Iron and Steel Association said allegations of intellectual property infringement were “completely baseless” and that it strictly abides by Chinese law and international norms.

The United States, European Union and others last week called for urgent action to address global steel overcapacity, after China and other major steel producing nations failed to agree on measures to tackle an industry crisis.

Britain in particular has been hit hard as its largest producer Tata Steel has announced plans to pull out of the country, threatening 15,000 jobs.

Anger toward China has grown since last year as its steel exports surged to a record 112 million tonnes, but a domestic steel price rally could help limit shipments this year as producers sell more at home.

Baoshan Iron & Steel, the listed unit of Baosteel Group, said the rapid increase in Chinese steel prices may deter government efforts to curb overcapacity in the sector in the short term by prompting once-shut mills to restart.

“This will slow the reduction in overcapacity, but with mills reopening and supplies rising and the government strengthening monitoring on real estate and futures, steel prices will fall,” Baosteel board secretary Zhu Kebing told a separate online briefing.

Zhu attributed the spike in steel prices to previous big production cuts, low inventories and an improving Chinese economy.

Reporting by Ruby Lian and Manolo Serapio Jr, additional reporting by Megha Rajagopalan in Beijing; Editing by Ed Davies

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