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More low-priced steel imports may be coming |
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administrator |
DATE |
2009-05-06 09:39:12 |
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More low-priced steel imports may be coming
AISI members concerned about foreign mills dumping steel on U.S. market
By Tom Stundza -- Purchasing, 5/5/2009
With the world steel market in recession, buyers in North America can expect even more low-priced steel imports in the near future. That’s the worry of domestic steel producers who protested and threatened to file lawsuits against dumping by foreign steel producers at a press briefing during the American Iron and Steel Institute (AISI) meeting in Phoenix. Dumping is selling in the U.S. market at prices below home-market prices.
Nucor Corp. CEO Dan DiMicco says U.S. trading partners “must be responsible and adhere to rules” so they don’t unfairly undercut pricing by domestic steel producers. DiMicco says steel companies already have appealed to trade officials for Washington to enforce trade laws and ensure competition. "That's not protectionism, that's law enforcement," DiMicco says.
The Charlotte-based steel executive points out that the domestic industry is working at 43% of capacity--“a level no one could have predicted when orders for steel were stronger earlier last year.” He says “there is no clear consensus among steelmakers when there will be an improvement in orders.” For that reason, finished steel imports are entering the U.S. at a 20 million-ton annual rate and already have grabbed 30% of the market this spring,
In a Reuters News report AK Steel head James Wainscott, who is current AISI chairman, also insists that “Washington must stand tough on trade laws.” That’s because “steel shipments in the U.S. were 13 million tons in the first quarter and even if there was a modest increase, the 2009 figure will be significantly down from the 98 million tons shipped in 2008,” he adds.
In a direct response to a Purchasing.com question about a projected slide in imports because of the rapid decline in U.S. market prices, DiMicco contends “there are way too many tons already for the level of demand” and “a direct cause of the (domestic) industry’s low capacity utilization rate.”
While most foreign-made steel is selling equal to domestic mill offering, DiMicco and other steel executives at the press briefing believe more low-balled tonnage is or soon will be heading into U.S. ports.
While only 22% of the steel buyers polled by Purchasing magazine this month expect to increase orders within 30 days, 41% of the end-market steel buyers surveyed by the Institute of Supply Management expect orders to be up in the next 90 days. However, steel executives questioned at a press briefing Monday say they are less optimistic than the ISM group and remain uncertain when a real recovery in purchasing will begin.
The ISM Steel Buyers Group survey show that 61% indicate inventories are too high relative to demand, a view shared by steel executives at a special American Iron and Steel Institute press briefing on Monday.
“We have not hit bottom in the drop-off in steel demand,” says DiMicco. He says the current global downturn “is, no doubt, the worst recession since the Great Depression We remain optimistic about the long term but it will be a long and slow recovery” in steel purchasing and production.
Resource from www.purchasing.com |
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