American steelmakers on Tuesday filed another petition demanding
tariffs on imports of foreign steel, and warned that China's
devaluation of the yuan could have severe repercussions on their
industry.
Six of the nation's biggest steelmakers—U.S. Steel, Nucor, AK
Steel Holdings Corp., ArcelorMittal USA LLC, SSAB Enterprises LLC,
and Steel Dynamics Inc.—filed their third trade complaint of the
summer, as they attempt to stem what Nucor Chief Executive John
Ferriola has called a "tsunami of foreign imports."
The request concerned imports of hot-rolled coil, which is used
in making cars, from Australia, Brazil, Japan, South Korea, the
Netherlands, Turkey and the U.K. China wasn't named in this
petition because the U.S. already has tariffs on imports of that
kind of steel from China.
Imports into the U.S. have tapered off after rising 7% in the
first quarter. Overall, in the first six months, steel imports are
now down 4.6% to 20.9 million tons, according to Global Trade
Information Services.
The problem for U.S. steelmakers is sluggish prices, which are
kept weak by inexpensive imports. The U.S. index price for
hot-rolled coil, a benchmark product, has fallen over 20% since
Jan. 1 to $468 per ton.
That is still around $100 higher per ton than the price in
Europe, and $200 higher than that in Asia, according to steel
buyers, making the U.S. a tempting market.
Imports of hot-rolled steel from the seven countries targeted in
the case "increased by approximately 73% from 2012 to 2014, rising
from 1.9 million tons to 3.3 million tons," AK Steel said in a
statement. "As a result of the increasing volumes of low-priced
imports, U.S. producers have suffered significant declines in
production, shipments, prices, and profits."
The problem could be compounded by China's move this week to
devalue its currency.
Thomas Gibson, a lobbyist in Washington for U.S. Steel Corp.,
Nucor Corp. and other steelmakers, said China's undervalued
currency was causing "massive damage" to "our nation's
manufacturing sector, especially the steel industry."
Chinese trade officials have denied intentionally trying to gain
market share by currency manipulation.
For U.S. steelmakers, these are not easy times. U.S. Steel, for
example, lost $261 million in the second quarter, and other
steelmakers have also taken hits to their bottom lines.
Potentially complicating the market, ArcelorMittal and U.S.
Steel are both locked in tense negotiations with the United
Steelworkers union over a new three-year labor deal. The talks
could theoretically end up in a strike, disrupting production.
But buyers aren't worried, says John Packard, publisher of Steel
Market Update, who says he recently surveyed a large swath of the
market.
"Steel is easy to get right now," he says. "Lead times are
short, and service centers have had an abundance of inventory. And
there's a perception there's quite a bit of unsold foreign
available, so buyers have gotten complacent."
Write to John W. Miller at john.miller@wsj.com
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