Steel Products Prices North America

Reader Feedback on "Traders View of Imports" Article

June 2, 2015

Steel Market Update found it interesting as we received a number of comments regarding Al Plummer’s letter to the editor regarding foreign steel imports, pricing and potential dumping. What was most interesting was the vast majority of the comments received were from other steel traders…

One trader responded to the continued threats of filing dumping against the Chinese with the following observation, “Saudi Arabia sets the price of oil with 14% of world production and 20% of world reserves, why it is hard for US steel mills to fathom that in today’s world with 50% of global steel production, China will set the world price and it is for US mills to restructure their costs around it than look to anti-dumping as a sustainable strategy.”

Another trader who has complained to SMU in the past about the Chinese predatory pricing practices also commented on Mr. Plummer’s article. This trader pointed out that the Chinese steel mills are not making any money under their current export strategy, at least not in the United States. The trader wondered, “…why do they under price their products so damn recklessly?”

A third trader, Peter Brebach of Iron Angels of Colorado, and a contributor to Steel Market Update from time to time, made the following observations, “Mr. Plummer’s efforts are commendable. However, he seems to insinuate that lower iron ore and coking coal prices create lower steel prices, and I think it’s the other way around. I also believe that while China might not be the only problem, due to it’s huge capacity overhang, it is at least 80% of the problem, certainly in the few products they are still allowed to ship here, including CR and Galvanized. And they most certainly do not just ship to the West Coast. When China increases their exports to non-US countries, those quantities replace other steel in those places, which then is forced to look for alternative destinations on the world market.

And as far as dumping suits are concerned, I wish somebody would look at how the dynamics have changed. 20 or 30 years ago, such suits used to be slam dunk. The DoC of course has not changed in that it never saw a dumping suit it did not like, and they invariably find huge margins. But the situation at the ITC has changed drastically, in that they much more often vote for no injury, and I wonder why?”

Your comments are welcome. You can send them to: info@SteelMarketUpdate.com.

SMU Note: At least two of the three traders commenting will be attending our Steel Summit Conference in Atlanta.