Trade Cases

Steel Trader Weighs in on Dumping Suits

Written by John Packard

August 2, 2015

Steel Market Update (SMU) received this Letter to the Editor from a steel trading company executive providing an opinion on the recent slew of antidumping trade suits on flat rolled steels:

First of all congratulations to Dave Phelps for his comments. As the longtime president of AIIS he has personally seen many years of domestic steel industry complaints being filed.
 
I would like to add a few points;
 
1. Ever since 1968 the US domestic steel industry has gone to Washington for help instead of competing on quality, service, modernization and developing an export business themselves. Yes, they are exporting to Canada and Mexico but exports to the rest of the world are almost non existent.

2. Many of our exports to Canada and Mexico are coming back to the USA as a manufactured product. How does that protect the domestic manufacturing basis?

3. As Dave pointed out correctly there are 60 times more manufacturing jobs in steel consuming industries than in the domestic steel industry and that doesn’t include customs brokers/agents, trucking companies, warehouse operators and others making their money on steel imports. The port of New Orleans can tell you a story about what it means if no steel is imported.

4. Successful dumping suits often result in higher domestic prices which make manufacturers in the US less competitive when selling abroad and competing with imported finished products here in the US. Not so long ago the price difference between domestic HRC/CRC and the world market was about $300/ton. Just imagine what advantage a manufacturer of water heaters, metal furniture, BBQ’s or tubular products has regardless  whether he is in Korea, Japan or Spain?

5. For some strange reason it is often not mentioned that 25% of all steel imports are semi finished steel products, basically all slabs. Has anyone ever seen a countervailing duty complaint being filed against the importation of slabs? How can you accuse Brazilian steel makers of having received illegal government subsidies on their CRC exports but they are not subsidized on their slab exports?
 
6. 50 years ago the US steel industry was on top of the world, after the destruction of the steel industries in Europe and Japan we were the biggest. Companies like US Steel, Bethlehem Steel and Armco were names recognized  around the world. Today the largest steel maker in the USA (Nucor) is No.14 in the world, and US Steel is No.18.  Among the top 100 steel producers in the world the US has five! (Our third largest is No.57)
 
There is no doubt that the overcapacity in China has changed the world of steel dramatically and 100 Million tons of exports from China are hurting steel industries worldwide. Is the filing of dumping and countervailing suits against countries like Japan, the UK, Italy or the Netherlands going to change that ?

John Packard

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