The U.S. International Trade Commission (“USITC”) made a preliminary determination of injury yesterday and said that investigations will continue on unfairly traded, low-priced imports of cold-rolled steel from seven countries.
The USITC found reasonable indications that a deluge of subsidized imports of certain cold-rolled steel flat products from Brazil, China, India, Japan, South Korea, Russia and the UK are causing or threatening to cause material injury to the American steel industry.
However, the USITC concluded that the quantity of imports of these products from the Netherlands is negligible (less than 3% of total cold-rolled steel imports during the 12 months preceding the filing of the trade case) and hence are not causing or threatening to cause injury to the U.S. industry. As such, the USITC has terminated the investigation on imports from the Netherlands, one of the eight countries accused of illegally dumping these products in the original petitions.
The case will now move to the U.S. Department of Commerce (“DOC”) which will continue its probes on such imports to determine whether these foreign steel makers are infringing the U.S. anti-dumping law by selling their products in the U.S. at less than fair value and violating the U.S. countervailing duty law covering government subsidies.
The DOC is expected to make preliminary countervailing duty determinations on the cold-rolled steel case by Oct 21, 2015, and preliminary anti-dumping duty determinations by Jan 4, 2016.
The nation’s biggest steel producers, on July 28, filed anti-dumping petitions with the USITC and the DOC against eight countries (Brazil, China, India, Japan, the Netherlands, Russia, South Korea and the UK) alleged for illegally dumping cold-rolled steel that is used to make automotive products and appliances, among others. Countervailing duty petitions were filed against Brazil, China, India, Russia and South Korea.
The petitions, which were filed by Nucor NUE, U.S. Steel X, AK Steel AKS, ArcelorMittal USA – a part of ArcelorMittal MT – and Steel Dynamics STLD, charge that a surfeit of subsidized imports of cold-rolled steel from these foreign producers are causing significant injury to the country’s steel industry. The petitions also charge that these producers benefit from a number of countervailable subsidies provided by their respective governments.
Imports of cold-rolled steel from these countries rocketed 120% between 2012 and 2014. These producers exported over $1.2 billion of cold-rolled steel to the U.S. market last year.
These products are being illegally dumped by foreign steel producers in the American market at unfairly low prices that considerably undercut the prices of U.S. steel makers. These imports have also captured an increasing share of the U.S. market, thereby hurting production, shipments, selling prices and margins of U.S. steel makers. Low costs of production have enabled overseas producers (especially China) to sell their products at cheaper rates, leading to an industry-wide price decline.
Imports of subsidized steel remain a significant concern for the U.S. steel industry. Domestic producers are struggling to cope with falling steel prices as a result of the combined impact of imports and overcapacity in the industry. Price declines are expected to continue if tariffs are not imposed on imports.
Per American Iron and Steel Institute ("AISI") – an association of North American steel makers – finished steel imports rose 6% year over year in the first eight months of 2015, based on the Commerce Department’s most recent Steel Import Monitoring and Analysis (“SIMA”) data. Estimated year-to-date market share of finished steel import is 30%, higher than 28% recorded for full-year 2014.
Domestic steel makers, in Jul 2015, applauded the USITC’s preliminary determination of injury on the corrosion-resistant steel case that was filed In June. The USITC found reasonable indications that imports of certain corrosion-resistant steel products from China, India, Italy, Korea and Taiwan are causing material damage to the U.S. steel industry.
Moreover, the DOC recently launched a probe into the alleged illegal dumping of certain hot-rolled steel flat products by seven countries into the American market. U.S. steel makers filled anti-dumping and countervailing duty petitions against these countries in August. The USITC is expected to make a preliminary determination of injury on the hot-rolled steel case on or before Sep 25.
An eventual victory in these trade cases will ensure a fairer and more competitive market for American steel makers and workers.
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