* Imports targeted by anti-dumping probe worth $1.3 billion

* Stainless steel imports jumped almost 200 pct last year

* Probe pits state-owned mills against private Chinese ones
abroad
– analyst

* China’s Tsingshan opened stainless mill in Indonesia last
year

* Nippon Steel, Posco, Acerionx, Outokumpu also named
(Adds response from European industry, data)

BEIJING, July 23 (Reuters) – China began an anti-dumping
investigation on Monday into stainless steel imports worth $1.3
billion, including from a privately owned Chinese mill with
operations offshore, after complaints of damage to the local
industry.

The Commerce Ministry said the investigation will target
imports of stainless steel billet and hot-rolled stainless steel
sheet and plate from the European Union, Japan, South Korea and
Indonesia, which nearly tripled last year.

The move follows a complaint by Shanxi Taigang Stainless
Steel, with backing from four other state-owned
mills including Baosteel’s stainless steel division, which
blamed cheap imports for falling prices, it said.

China makes and consumes around half the world’s stainless
steel, which is used to protect against corrosion in buildings,
transportation and packaging.

While the complaint targets eight foreign producers, it also
lists a number of Chinese companies, including the Indonesian
unit of one of the world’s top producers, Tsingshan Stainless
Steel, and 19 traders who import product.

Some private Chinese companies have opened or started
building plants in Indonesia in recent years, drawing on its
plentiful nickel resources and lower cost of production.

A significant portion of the new production has been sold in
China, analysts say.

The rapid increase in imports damaged the Chinese market,
according to the complaint filed by Shanxi Taigang and released
with the commerce ministry document.

Almost two-thirds of China’s stainless imports came from
Indonesia last year, up from 5 percent in 2016 and zero in 2015,
the complaint said. That rose to as high as 86 percent in the
first quarter, it said.

Imported prices of the stainless steel products fell 23
percent to $1,867 a tonne in 2017 from $2,436 a year earlier.

“If we allow these products to continue to enter the Chinese
market with low prices and take more market share, sales of
China’s domestic products will continue to decrease,” the
complaint said.

INDUSTRIAL DISPUTE

Peter Peng, senior consultant at CRU in Beijing, said the
investigation was “totally driven by an industrial dispute
between SOEs (state-owned enterprises) and the fast-growing
private mills”.

“Due to their cheap production costs, it’s more competitive
than Chinese products,” he said.

Tsingshan opened a mill in Indonesia last year with annual
capacity of 3 million tonnes while Delong Holdings
plans to start production there next year.

Anti-dumping duties would force mills to find new markets
for their product, adding to a global glut, Peng said.

The European companies targeted by the inquiry include
Spain’s Acerinox, Finland’s Outokumpu Oyj
and Luxembourg-based Aperam.

Among the Japanese companies are Nisshin Steel Co Ltd
, Nippon Steel & Sumitomo Metal Corp and JFE
Steel Corp. Indonesia’s PT Jindal Stainless and South
Korean steelmaker Posco are also listed.

“We are quite surprised (by) this action and (will) have to
carefully analyse the situation,” said Matteo Rigamonti,
director of specialty steels at the European industry
association Eurofer.

Europe exported just 22,000 tonnes of stainless billet and
hot-rolled sheet and plate in 2017, he said, down 50 percent
from 2014 and a small fraction of China’s total imports of the
metal.

China imported 703,000 tonnes of those products in 2017, up
almost 200 percent from a year earlier, with 98 percent coming
from the regions targeted by the investigation.

Shanxi Taigang accounts for 25-35 percent of China’s
stainless production.
(Reporting by Muyu Xu and Josephine Mason; additional reporting
by Maytaal Angel; editing by Richard Pullin and David Stamp)