Global Steel Trade; Structural Problems and Future Solutions

Reports of Tightened Supply
The impact of the trade cases on steel imports has caused some steel consumers to fear that markets may
tighten, leading to shortages or long lead times. In particular, consumers have raised concerns about
potential disruptions in the heavy structurals market. One president of a major steel distribution firm
reported that inventories have declined, and that, unable to meet demand for wide flange beams (a heavy
structural product), mills have responded by instituting a “controlled order booking system,” better known
as “allocation.” 13
However, there have also been indications that any tightness or disruptions in the heavy structurals
market may have been temporary. Recently, prices for heavy structurals have fallen, an indication that
shortages in this product are unlikely. 14 In addition, in a letter to the editor, H. Louis Gurthet, President
of the American Institute of Steel Construction (AISC), stated, “Considering the overall market, it
appears that supply is reasonably meeting current market demand.” 15 Gurthet’s letter responded to an
article that indicated that trade cases may be causing supply problems in the market for beams. AISC
represents fabricated structural producers, which purchase heavy structurals to further process for
construction purposes.
Imports Continue to Increase in Some Product Categories
While overall steel imports declined, there were some notable exceptions. 16
• Imports of concrete reinforcing bar (rebar) increased 49 percent in 1999 compared to 1998, on top of a
75 percent increase from 1997 to 1998.
• Imports of wire rod products increased 17 percent in 1999 over 1998. However, imports of this product
in future years will be affected by the President’s decision to grant Section 201 relief.
• Imports of semifinished steel, used by U.S. steel producers to manufacture finished steel products,
increased 27 percent in 1999 over 1998, an increase of 1.6 million MT, the largest volume increase for
any product category that year.
Steel Prices Begin to Rebound in the Second Half of 1999
While prices fell sharply in the face of surging
imports, their rebound has been much slower.
Prices remained flat for much of the first half of
1999 and began to show signs of recovery only in
the second half of the year. As the pressure from
unfairly traded imports subsided, companies have
been able to raise prices for a number of
products. However, as of first quarter 2000,
prices for most products remained below 1997
levels, and there are recent indications that some
of the latest announced price increases are not
taking hold. 17
Today, as a result of the elimination of illegally
imported steel, we are experiencing a very good
hot-rolled and cold-rolled market. Our order book
is full and lead times are extended. Prices are
definitely improving.
John Duncan
Vice President for Flat-Rolled Products
Gulf States Steel at Sunbelt Steel 2000
(December 1999)
• As of March 2000, U.S. spot prices for wide flange beams, wire rod, and galvanized sheet were still
down by roughly 15–30 percent from December 1997 levels. 18
• Spot prices for rebar, cut-to-length plate and stainless cold-rolled sheet were also down for the same
period. 19
• Although by May 2000, hot-rolled and cold-rolled prices were at December 1997 levels, they were still
down 10 percent from levels earlier in 1997. 20
114 Global Steel Trade: Structural Problems and Future Solutions