Trade Cases

Letter to the Editor: Circumvention and Other Thoughts

Written by John Packard

After our last issue of Steel Market Update was published we received an email “letter to the editor” from a steel trading company regarding circumvention and other issues facing the domestic steel industry. Here is what the letter said:

“After reading your update tonight and having been on a conference call with our Washington DC attorney regarding the “circumvention” complaint against Vietnam, I can’t help but make a few comments:

Now that China has been shut out of the U.S. market the high cost integrated mills & mini mills in the United States turn their attention to Vietnam alleging circumvention of products from China. Their claim is that the Vietnam mills have made “insignificant investments” and do not substantially transform hot roll when converted to cold roll and coated products.

I visited Vietnam earlier this year and toured some of the best looking cold mills and coating lines in the world. You see workers that are dedicated and work as hard as any workers in the world. Why should they not be allowed to take advantage of low priced hot roll from China or anywhere else that is available to them?

To claim the cold roll and coated they produce is not substantially transformed is absurd. It goes against the U.S. mills claims in their Anti Dumping cases in which they differentiate between hot roll, cold roll and coated in all cases.

The Anti Dumping cases brought against China were justified and duties imposed were appropriate. To now have the U.S.W. accusing Donald Trump of circumvention by using imported steel in his buildings is laughable. I grew up in a steel mill town and worked in the mill as well as in sales. I am now with an Asian based trading company buying steel from U.S. mills as well as importing product from Vietnam. The mills in the U.S. got everything they asked for with the recent Anti Dumping cases and they are still not satisfied.

A company like USS needs to take a harder look in the mirror. They refused to embrace electric furnace technology until it was too late and remain the highest cost producer of steel in the United States (maybe in the world). Not to mention the disaster in Canada they created. They are the largest producer of tin mill products in the country and ask any of their tin mill customers what their performance has been like this year.

Didn’t anyone on the USS board of directors ever ask why Nucor and SDI make money and USS does not? They cannot compete against Nucor & SDI and never will. Now they have Big River to contend with.

The Carnegie Way has supposedly saved more than a billion dollars in costs and they still do not make money. Maybe they should consider getting rid of their private hangar and private jets but that would be awfully inconvenient for those used to such luxury. With cell phones, airline clubs and commercial aircraft that offer WiFi, there is no justification for a permanent fleet of private jets. Executives can be in touch and do work on commercial aircraft but I have to admit those seats are not as comfortable as those Gulf Stream seats.

Arcelor Mittal has to start a blast furnace in Indiana as part of their recent labor agreement with the union. Just what the market needs, more melt production introduced in a down market. All of that melt will not be going into slabs to Calvert so there will be added down pressure on the hot roll market so whose fault is that?

It is a big small world out there so the mills in the U.S. need to get used to it.”

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