U.S. Steel Files Trade Complaint Against China -- Update
April 26 2016 - 6:50PM
Dow Jones News
By John W. Miller
PITTSBURGH -- U.S. Steel Corp. on Tuesday filed a tough new
trade complaint against China as it reported another quarter of
disappointing results.
The company posted a net loss for the first quarter of $340
million, or $2.32 per share, down from $75 million, or $0.52 per
share, in the same quarter a year ago. U.S. Steel now lost money in
seven of the past eight quarters.
Net sales declined 30% to $2.3 billion from $3.3 billion.
Chief executive Mario Longhi said in a statement that the
company would "remain focused on reducing our costs, improving the
quality and reliability of our operations," and selling
"differentiated," or higher quality, steel. That steel includes
lighter-weight steel for auto manufacturing, at a time when car
makers are looking for lighter materials and aluminum is
increasingly competing with steel.
Mr. Longhi said the company is positioned to benefit in the
second quarter from rising steel prices, which are being helped by
falling inventories, and a pickup in demand, especially in the
automotive market. The benchmark hot-rolled coil index has risen to
$520 per ton, up 37% since Jan. 1., after falling 33% last
year.
In addition, steel imports into the U.S., which had been
increasing, declined 35% to 5.1 million tons in January and
February of 2016 compared with the same period a year ago. Imports
from China fell 70% to 119,895 tons.
But U.S. Steel is still seeking more trade protection. In a
complaint filed Tuesday with the International Trade Commission it
demanded penalties on Chinese steel imports which could include a
total ban on imports into the U.S. In particular, U.S. Steel said
that Chinese steelmakers conspired to fix prices, stole trade
secrets and circumvented duties with false labeling.
"We have said that we will use every tool available to fight for
fair trade," said Mr. Longhi. "With today's filing, we continue the
work we have pursued through countervailing and anti-dumping cases
and pushing for increased enforcement of existing laws."
The move by U.S. Steel comes amid rising tension between
American metal makers and China, which has dramatically ramped up
production and exports of steel and aluminum this decade. Chinese
steel exports rose 22% last year to 100.4 million tons, while
aluminum shipments increased 9% to 6.7 million tons.
This year already, the U.S. has slapped tariffs on imports of
several categories of Chinese steel, partly as a result of
complaints made last year by U.S. Steel. This month, the ITC
announced an investigation into overproduction in global aluminum,
a move that could pave the way for new tariffs on Chinese
imports.
U.S. Steel made the announcement about the complaint shortly
before reporting first quarter earnings. A spokesman for
ArcelorMittal, which operates steel mills in the same regions as
U.S. Steel, said the company hadn't been asked to support the
petition.
A spokeswoman for the ITC said the complaint was being processed
but it doesn't comment on the content of complaints.
The ITC held hearings in Washington earlier this month on damage
suffered by the American steel sector.
The ITC now has 30 days to evaluate the petition and decide
whether to initiate a case. After that, such a case can take up to
18 month to prosecute, according to trade experts.
Write to John W. Miller at john.miller@wsj.com
(END) Dow Jones Newswires
April 26, 2016 18:35 ET (22:35 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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