I have been pointing to the circumvention ruling as one of those “Black Swan” events that could come back to haunt the way importers do business. The section of the ruling that could potentially have the most teeth is the definition of what constitutes “significant transformation,” which allows substrate from one country to be converted by another thus changing the country of origin.
Here is what a Chicago area service center had to say on the subject: “I think the mills are in a great position. The ruling on the circumvention case will have strong effects even if Chinese substrate hasn’t been used there for a while and even if Vietnam imports into the U.S. have been declining all year. If HR being transformed to CR and HDG doesn’t count as significant transformation, wouldn’t it then be true that HR converted to line pipe wouldn’t be significant transformation either? And how about the other suppliers of HR to Vietnam who themselves have restrictions on shipping HR to the U.S., countries like Korea and Japan? I think this ruling may be bigger and more ‘expensive’ for the U.S. steel buying market than people realize. There’s all kinds of transformation going on with steel being used from countries that can’t ship HR/CR to the U.S. but where the country transforming doesn’t have those restrictions. The lawyers in trade will also be very busy/happy.”
I have warned buyers before (and I warned the Vietnamese mills when they started shipping to the U.S.), be very careful when selecting your suppliers. This battle has only just begun. Pandora’s Box is now open.
Some comments about our holiday publishing schedule. SMU will not publish either our Executive or Premium newsletters between Christmas and New Year’s Day. Our last newsletter of the year will be published on Thursday, Dec. 21, and we will resume our regular schedule on Tuesday, Jan. 2, 2018. Most of our employees will be on vacation the week of Christmas through New Year’s Day. Alison LaLonde (Alison@SteelMarketUpdate.com) will be checking messages and responding to calls/emails during our absence.
I want to thank the HARDI steel committee for inviting me to speak at this year’s HARDI annual confererence, which was held at the Aria in Las Vegas. HARDI puts on a great conference every year and this year was no exception.
We have opened up our advertising spots for calendar year 2018. We have about half of the banner ads committed for the year, and a number of other spots have also been sold. If you are interested in advertising in our newsletter or on our website, please contact Brett Linton at Brett@SteelMarketUpdate.com.
We also have a few sponsor spots left for the 2018 SMU Steel Summit Conference. We have plenty of exhibition space available. You can learn more about how to become a sponsor or exhibitor by contacting Jill Waldman at Jill@SteelMarketUpdate.com.
Lastly, registration is open for our March 2018 Steel 101: Introduction to Steel Making & Market Fundamentals workshop, which will be held in Merriville, Ind. (just outside of Chicago). We will be touring the NLMK USA Portage steel mill. Details are on our website or you can contact Brett Linton or myself with any questions that you might have.
As always, your business is truly appreciated by all of us here at Steel Market Update.
John Packard, Publisher
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