By John W. Miller
A group of steelmakers on Tuesday asked the U.S. government to
impose tariffs on steel shipments from eight countries, the latest
salvo in the American industry's battle to cope with record
imports.
The petition claims that steelmakers in Brazil, China, India,
Japan, South Korea, Netherlands, Russia and the U.K. dumped--or
sold at unfair prices--cold-rolled steel, which is used in
construction and to make appliances, automotive products and
containers. It also claims that Brazil, China, India, South Korea,
and Russia have illegally subsidized their steelmakers.
The companies that filed the request-- AK Steel Holdings Corp.,
the U.S. unit of ArcelorMittal; Nucor Corp.; Steel Dynamics Inc.
and U.S. Steel Corp.--say their business has been hurt by the
imports. News of the petition helped boost the stock market value
of all five companies Tuesday.
The American steel industry needs help. The U.S. benchmark
hot-rolled coil index is down 22% to $467 a ton since the start of
the year. At the root of the problem are record exports from China
as that economy cools. China buys roughly half the world's steel,
so any hiccup matters.
Not all the imports into the U.S. come from China, but many are
displaced from countries where China has grabbed market share. The
environment has frustrated American steelmakers because their
domestic market is relatively solid, with the exception of the oil
and gas industry, which has suffered from the oil price swoon.
Imports of cold-rolled steel from the eight countries more than
doubled between 2012 and 2014, from 798,000 tons to 1.75 million.
In 2014, these countries exported more than $1.2 billion of
cold-rolled steel to the U.S.
"AK Steel and the domestic industry have been facing a surge of
what we believe are unfairly dumped and subsidized imports of
cold-rolled steel coming into this country," said James L.
Wainscott, the company's chairman and chief executive. AK Steel
said cold-rolled steel comprised about 20% of its shipments in
2014.
On Tuesday, AK Steel reported a second-quarter loss of $64
million, or 36 cents a share. Even with Tuesday's stock-price
gains, the company has lost over 65% of its market value in the
past year.
Nucor reported a 15% drop in profits when it released
second-quarter results last week.
The tariffs might not be a solution to the steel industry's
woes. "The tariffs will help prices in the short term but
eventually buyers will find other sources of supply," says Charles
Bradford of Bradford Research Inc.
It is the second big trade action the steel industry has taken
this year. In June, six U.S. steelmakers filed a petition against
five countries, including China, seeking to protect their market
for a common kind of coated steel used in the automobile and
construction industries.
The U.S. Commerce Department will rule before the end of the
year whether or not to impose duties. Congress recently passed
legislation making it easier for industrial companies to obtain
tariffs on imports.
Write to John W. Miller at john.miller@wsj.com
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