Congressional Steel Caucus wants to Investigate China Investment in Steel Mill
The Steel Caucus of the US Congress Friday called on the Committee on Foreign Investment in the United States (CFIUS) to investigate China's recent investment in a US-based steel company, according to a letter released by Steel Caucus Chairman Pete Visclosky (Dem-Indiana) and Vice Chairman Tim Murphy (Rep-Pennsylvania).
The letter to US Treasury Secretary Timothy Geithner, signed by 50 members of the bipartisan Steel Caucus, raises concern over the investment of China's Anshan Iron and Steel Group in the US-based Steel Development Company "and the effect it would have on American jobs and US national security." It maintains that the investment "allows the full force and financing of the Chinese government to exploit the American steel market from American soil."
The letter emphasizes that "Anshan is controlled by China's Assets Supervision Commission of the State Council, and this enables the Chinese government to direct Anshan to pursue China's aims." It stressed that such control enables Anshan "to easily obtain subsidized financing, even in today's economic conditions, which could allow them to distort the American market and force American steelworkers to compete against a blank check."
The legislators also said in the letter that the full details of the transaction are not publicly known and "that it may pose national security risks."
On July 1, Platts reported several steel-capacity expansions in the US. According to the New York-based Affiliated Research Group (ARG), the Steel Development Company is planning four rebar micro-mills and one flat-rolled mini-mill in Mississippi and Texas, respectively, with a combined capacity of nearly 2 million st/year.
ARG described the ventures as having 15% Chinese ownership through Anshan's involvement.
John Correnti, the long-time former Nucor executive, is chairman and CEO of Steel Development Company (SDC). Nucor's current chairman, president and CEO, Dan DiMicco, has been an outspoken critic of Chinese policy as it relates to the country's steel industry and currency valuation.
SDC, however, would also compete directly with Nucor and other US-based mini-mills by bringing more rebar and flat-rolled steel to the market
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