• Mexico Hits U.S. Exports with Tariffs
  in Retaliation for Byrd Amendment
• MSCI: Service Center Steel
  Shipments Decline in July
• IISI: World Steel Output Up,
  But Down in U.S., Canada
• SSINA: Stainless Imports
  Up 15% in 1st Half

Mexico Hits U.S. Exports with Tariffs
in Retaliation for Byrd Amendment
Mexico has imposed retaliatory duties on U.S. exports because Congress has not repealed the Byrd amendment, formally known as the Continued Dumping and Subsidy Offset Act of 2000. Mexico began imposing tariffs of $20.9 million in three product categories on Aug. 18.

In 2002, the World Trade Organization ruled that the Byrd Amendment violates U.S. trade obligations, clearing the way for retaliatory sanctions by eight WTO member countries. The WTO later authorized eight countries to retaliate based on the amount of Byrd Amendment distributions by the United States.

Mexico will impose a 30 percent duty on dairy products, including baby formula; a 20 percent duty on wine; and a 9 percent duty on candy and chewing gum.

Mexico’s action follows that of Japan, the European Union and Canada in imposing duties on the United States this year because of the Byrd Amendment. Total retaliatory tariffs from these countries now amount to nearly $114 million, according to the Consuming Industries Trade Action Coalition.

CITAC is among the steel consumer groups and foreign producers urging Congress to repeal the amendment, which they contend amounts to an unfair subsidy for a relative handful of companies.

Under the Byrd Amendment, some American manufacturers directly receive proceeds from U.S. duties as compensation for losses to foreign competitors who illegally dump goods in the U.S. market.

American steel producers, among the beneficiaries of the Byrd Amendment, continue to dispute the WTO’s findings and are urging Congress to hold firm.

MSCI: Service Center Steel Shipments Decline in July
Steel shipments from metal centers in the United States and Canada declined during July when compared with shipments in July 2004. Aluminum shipments from U.S. service centers rose for the 19th consecutive month, but declined at Canadian service centers, according to data from the Metals Service Center Institute.

Steel product shipments from U.S. service centers during July fell 9.1 percent to 4.08 million tons compared with July 2004. Year-to-date shipments of steel products, at 32.04 million tons, declined 4.1 percent from shipments during the same period last year.

Steel product inventories at the end of July at U.S. service centers totaled 14.32 million tons, up 2.8 percent from the end of July 2004, but down 3.6 percent from June. At July’s shipping rate, inventories represented a supply sufficient for 3.5 months, up 12.9 percent from last year and the highest level since February.

U.S. service centers shipped 93,500 tons of aluminum products in July, an increase of 3.5 percent over July 2004. Year-to-date shipments of aluminum products, at 693,700 tons, were 7.0 percent above the same period last year.

Aluminum inventories of 369,000 tons at the end of July were up 14 percent from July 2004, but down 1.3 percent from June 2005. Aluminum inventories represented a 3.9-month supply, up 8.3 percent from a year earlier.

Canadian service centers shipped 287,500 tons of steel during July, down 12.4 percent from a year ago. Year-to-date shipments of 2.43 million tons were down 7.9 percent from the same period of 2004.

Steel inventories at Canadian service centers were 1.11 million tons at the end of July, down 0.2 percent from the end of July 2004 and 2.4 percent lower than in June. This represents a 3.9-month supply of steel products at current shipping rates, an increase of 14.7 percent from a year ago and a 25.8 percent increase from June 2005.

July shipments of aluminum products from Canadian service centers fell 2.4 percent from July 2004 to 7,900 tons. Year to date, aluminum shipments of 66,800 tons grew 2 percent from the seven-month period in 2004.

Canadian service center aluminum inventories at the end of July, at 31,300 tons, were up 13.2 percent from July 2004. At current shipping rates, they represented a four-month supply, up 17.6 percent from a year ago and 33.3 percent from June.

IISI: World Steel Output Up,
But Down in U.S., Canada
World crude steel production for the 61 countries reporting to the International Iron and Steel Institute, Brussels, was estimated to be 90.3 million metric tons in July. This is 4.5 percent higher than for the same month of 2004.

Chinese production was 29.2 million metric tons in July, a rise of 28.6 percent compared to July 2004. Total crude steel production in China is 193.8 million metric tons for the first seven months of 2005, or 28.1 percent above the same period of 2004. Total production in Asia was 47.8 million metric tons in July, an increase of 18.2 percent from July 2004.

Crude steel output in the United States was 7.6 million metric tons in July, down 9.1 percent from a year ago. Year-to-date production in the U.S. was 54.5 million metric tons, 4.7 percent lower than for the first seven months of 2004.

Production in Canada was 1.1 million metric tons, 13.8 percent lower than in July 2004. Total Canadian production for the first seven months of the year was 9.2 million metric tons, 2.7 percent lower than for the same period last year.

SSINA: Stainless Imports
Up 15% in 1st Half
During the first half of 2005, imports of stainless steel products totaled 344,014 tons, a 15 percent increase from the same period of 2004. U.S. consumption was 1,168,282 tons, a 3 percent decline while import penetration was 29 percent, up 4 points from last year, according to the Specialty Steel Industry of North America.

Following are the six-month data comparisons for each of the specialty product categories that SSINA tracks:

• Stainless steel sheet/strip imports totaled 192,442 tons, a 7 percent increase over 2004. U.S. consumption during the period was 851,211 tons, down 4 percent from last year. Import penetration was 23 percent, a 3-point increase over 2004.
  
• Stainless steel plate: Imports were 38,507 tons, up 1 percent; U.S. consumption was 132,309 tons, down 13 percent; import penetration was 29 percent, up 4 points.
  
• Stainless steel bar: Imports were 64,709 tons, up 71 percent; U.S. consumption was 126,183 tons, up 27 percent; import penetration was 51 percent, up 13 points.
  
• Stainless steel rod: Imports were 25,496 tons, a 21 percent increase; U.S. consumption was 38,941 tons, down 10 percent; import penetration was 65 percent, up 16 points.
  
• Stainless steel wire: Imports were 22,861 tons, a 13 percent increase; U.S. consumption and import penetration are not calculable.
  
• Alloy tool steel: Imports totaled 60,869 tons, up 45 percent; U.S. consumption and import penetration are not calculable.
  
• Electrical steel: Imports reached 47,033 tons, a 21 percent increase; U.S. consumption was 208,185 tons, an 8 percent increase; import penetration was 23 percent, up 3 points.
  

Total imports of specialty steel—comprising stainless steel, alloy tool steel and electrical steel—from January through June were 451,916 tons, a 19 percent increase. U.S. consumption remained flat compared with first-half 2004 at 1,427,693 tons. Import penetration was 32 percent, up from 27 percent last year, according to SSINA figures.