Steel Mills
JSW Accuses Cliffs, Nucor and U.S. Steel of Slab Boycott
Written by Sandy Williams
June 8, 2021
JSW Steel (USA) and JSW Ohio are accusing Nucor, U.S. Steel and Cleveland Cliffs of conspiring to boycott and deny critical semi-finished steel slab to the company.
A lawsuit filed on June 8 alleges that the three steel giants have formed a cartel that has cost JSW millions of dollars in lost profit. According to JSW Steel (USA) Board Member Parth Jindal, the three steel companies have repeatedly stated that they were able and willing to meet JSW’s needs for steel slab but failed to do so.
Section 232 tariffs limited the ability of JSW to seek foreign sources of slab for processing. In March 26, 2018, JSW announced it would expand its Baytown facility and a few days later acquired the Wheeling Pittsburgh Steel mill in Mingo Junction. The company was poised to restart the electric arc furnace and add a new one to the facility creating jobs and serving the auto and construction sectors. Baytown was to produce products for the energy sector.
The JSW announcements came shortly after the Trump administration imposed Section 232 tariffs on steel and aluminum. The tariffs were lauded by the company as strong trade enforcement that would energize the steel industry and stop illegally dumped steel into the U.S. JSW assumed it had the blessing of the Trump administration and was told by then Secretary of Commerce Wilbur Ross that the administration would look “very favorably” on the company’s request for an exclusion for steel slabs.
It was not to be, however, despite repeated requests for exclusions on slab imports from India and Mexico. Although JSW stated the U.S. steel industry did not produce the quantities and specifications required by the company, Nucor, U.S. Steel and AK Steel objected to the exclusion requests insisting that a sufficient amount of slab was domestically available.
With no relief from steel producers or from the Section 232 exclusion process, JSW Steel sued the government in July 2019 in the U.S. Court of International Trade requesting refunds of the tariffs that the company was forced to pay.
Today’s suit against U.S. Steel, Nucor and Cleveland-Cliffs (the current owner of AK Steel) alleges that the defendants used “anticompetitive tactics against smaller producers like JSW to succeed at all costs.”
“We bought into the U.S. market a few years ago and made significant progress in improving our facilities and performance,” said Jindal. “In 2018, we announced our intention to make substantial investments to further expand and upgrade our facilities. These companies derailed those plans, and so we file this suit today to respond assertively.”
The company also sales the alleged cartel “led to higher prices and significant harm to U.S. steel buyers and significantly fewer jobs for U.S. steelworkers.”
JSW’s complaint is based upon the federal antitrust laws and Texas state laws. It seeks treble damages, which are automatic under the federal antitrust laws, compensatory and exemplary damages, and attorneys’ fees and costs. The company is represented in the case by the law firm of Baker Botts L.L.P.
Media representives for Cliffs, Nucor and U.S. Steel said their companies do not comment on pending or potential litigation. “We look forward to responding to these allegations using the legal process,” the Nucor spokeswoman added.
By Sandy Williams, Sandy@SteelMarketUpdate.com
Sandy Williams
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