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U.S.
Steel Industry Wary
of Another Import Surge
The United States imported 2,195,000 net tons of steel in September,
including 1,762,000 tons of finished steel, according to Census
Bureau data reported by the American Iron and Steel Institute. While
these figures were down 5.2 and 7.7 percent, respectively, compared
to August 2005, imports of individual products jumped considerably
in September, including plates in coil (up 44 percent), hot-rolled
sheets (up 30 percent), galvanized electrolytic sheet and strip
(up 29 percent) and plate cut to length (up 28 percent).
Year-to-date
total and finished imports, though down 7.9 percent in both categories
vs. 2004, remain 14 percent above pre-1988 import surge levels.
Key products seeing large year-to-date increases include oil-country
goods (up 55 percent), galvanized and electrolytic sheet and strip
(up 45 percent), cold-finished bars (up 43 percent), tin plate (up
32 percent) and all other metallic coated sheet and strip (up 23
percent).
Year-to-date
finished imports are also up substantially from non-market economies
and countries that historically subsidize their steel industries
and intervene in steel, raw material and currency markets, say AISI
officials, including China, Malaysia, Thailand, Ukraine, South Korea
and Japan.
U.S.
spot prices for hot- and cold-rolled sheet in September rose 15
and 12 percent, respectively, after declining the previous 11 months
in a row, according to data publicly reported by Purchasing Magazine.
The September 2004-September 2005 price declines for these products,
however, were 34 and 26 percent, respectively.
“Imports
continue at a steady pace,” said John Surma, president and
CEO of U.S. Steel Corp. and chairman of AISI, “but with increasing
evidence of state-supported excess capacity overseas, we are closely
monitoring the influx of imports in individual categories and from
countries that have historically interfered with market forces through
subsidies, currency interventions and other unfair trade practices.”
Byrd
Repeal in the Works?
The House Ways and Means Committee has approved a measure that calls
for the repeal of the Continued Dumping and Subsidy Offset Act,
also known as the Byrd Amendment, as part of a budget reconciliation
bill now on its way to the House Budget Committee.
“The
Byrd Amendment is the ultimate combination of protectionism, corporate
welfare and government waste,” says Rep. Jim Ramstad, R-Minn.,
who co-sponsored the legislation. “It costs taxpayers millions
of dollars in subsidy payments and consumers millions in higher
costs.”
On
Sept. 26, the Government Accountability Office released the results
of a year-long review of the Byrd Amendment, concluding that the
law has benefited only a handful of large companies in only a few
industries—including steel—and that accountability for
their claims is questionable.
The
World Trade Organization ruled in 2002 that the Byrd Amendment violates
U.S. trade obligations. Congress’ failure to repeal the law
has resulted in WTO-authorized retaliation against U.S. exports
by Canada, the European Union, Japan and Mexico on various products.
Total retaliatory tariffs from these countries are approximately
$114 million.
Industry
and trade groups that support the Byrd Amendment continue to maintain
that its distributions enable companies and workers to survive in
the face of unfair foreign competition. Under the amendment, some
duties on illegal imports go directly to “affected domestic
producers” harmed by the dumping.
AIIS:
‘Halt Import Duties During
Hurricane Reconstruction’
The American Institute for International Steel, which represents
foreign mills, is urging President Bush to consider eliminating
all import duties on steel products to reduce the burden of post-hurricane
reconstruction costs on taxpayers.
Many
foreign steel products currently face antidumping or countervailing
duties, including hot-rolled sheet, plate, structurals, rebar, pipe
and tube from various countries—all critical building materials
in the rebuilding effort, notes David Phelps, AIIS president. For
the government or private sector to pay duties on products needed
to rebuild the hurricane-affected areas would only increase the
cost of the effort, he says.
AIIS
proposes a three-part policy: that duties should be waived on all
steel products needed for the reconstruction effort; that duties
be waived on all steel products determined to be in short supply
to ensure availability to steel consumers not involved in the reconstruction
effort; and that all “Buy American” preferences for federal
highway and bridge construction and mass transit procurement also
be waived.
MSCI:
Aluminum, Steel Inventories Down
The 2005 trend of aluminum shipment increases and steel shipment
decreases continued through September at U.S. and Canadian service
centers, according to the most recent Metals Activity Report from
the Metals Service Center Institute.
Steel
inventories at U.S. service centers were lower at the end of September
in both year-over-year and month-to-month comparisons, while year-over-year
inventories of aluminum products were higher at the end of September
than at the end of September 2004. Steel inventories at Canadian
service centers were lower at the end of September than year-earlier
and month-earlier levels, while aluminum inventories were up in
both year-over-year and month-to-month comparisons.
U.S.
service centers shipped 4.62 million tons of steel products in September
2005, an increase of 0.1 percent over the same month a year ago.
Year-to-date shipments of steel from U.S. service centers, at 41.6
million tons, were down 3.1 percent from the same period in 2004.
U.S.
service centers’ steel inventories at the end of September
totaled more than 12.9 million tons, down 12.9 percent from September
2004 and 3 percent from August. The 2.8-month supply at month’s
end was down 12 percent from a year ago, but 3.7 percent above August
2005.
U.S.
service center shipments of aluminum products of 111,870 tons in
September were up 6.5 percent from September 2004 and marked the
21st consecutive month of year-over-year increases. Year-to-date
shipments of aluminum totaling 905,600 tons were 7.3 percent higher
at the end of September than in the same period of 2004.
Aluminum
inventories at U.S. service centers, 357,600 tons, were 6.7 percent
higher than at the end of September 2004, but down 2.6 percent from
August. At the current shipping rate, this represents a 3.3-month
supply of aluminum, down 5.7 percent from August 2005.
Canadian
service center steel shipments totaled 374,200 tons in September,
up 6.9 percent from September 2004. Year-to-date shipments of nearly
3.2 million tons were down 5.6 percent from the same period in 2004.
Steel
inventories at Canadian service centers totaled 1.03 million tons
at the end of September, a decrease of 4.1 percent from September
2004 and August 2005. At the current shipping rate, this represents
a 2.7-month inventory supply, a decrease of 12.9 percent from a
year ago and a decrease of 10 percent from August 2005.
September
aluminum shipments from Canadian service centers rose 3.7 percent,
to 10,500 tons, compared with September 2004. Year-to-date shipments
of 87,300 tons are 2.9 percent higher than the same period a year
ago.
Canadian
service center aluminum inventories of 32,800 tons were up 14.8
percent from a year ago and 2.5 percent from August. At current
shipping rates, this is a 3.1-month supply, up 7.5 percent from
a year ago, but down 3.1 percent from August 2005.
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