Global Steel Trade; Structural Problems and Future Solutions

83. U.S. Department of Commerce, Import Administration Steel Import Monitoring Program. Figures based on
data provided by the U.S. Department of Commerce Bureau of the Census.
84. Id.
85. Indonesia, Malaysia, Singapore, and Thailand
86. According to Bank of Korea information cited in the CMA-Korea, “The Steel Market and Market Trends,” the
average exchange rate for 1998 was KrW1398.9/1USD. The average exchange rate for 1997 was KrW951.1/1USD. This
represents an average depreciation for the Korean won of 32 percent against the US dollar.
87. CMA-Korea, “Steel Questions Four.” Note that these value percent increases will be higher than percent
increases in volume terms. This is the because the depreciation of the won would by itself increase the wondenominated
revenue earned on foreign currency sales. Notwithstanding this, even the volume increase was
significant for these producers. For example, Dongkuk’s exports of plate increased from about 151,000 in 1997 to
about 869,000 MT in 1998, an increase of over 475 percent. The company’s rebar exports increased even more during
the same period, by about 680 percent, in percentage terms. Hannuri Investment & Securities, Mini-Mills–
Turnaround in Sight, 30 July 1999. Hanbo’s exports also surged, from 354,000 MT to 631,000 MT, or almost 80
percent. Government of Korea March 9, 1999, Response to USTR’s Questions.
3.4 Brazil
1. Conselho Administrativo de Defensa Economica (CADE) Report, Administrative Proceeding No. 08000.015337/
94-48. [Hereinafter CADE Report]
2. For example, Brazil’s largest steel producer, CSN, stated in its 1998 annual report filed with the U.S. Securities
and Exchange Commission that Brazilian home market steel prices historically are higher than those in the export
market. See Securities and Exchange Commission, CSN’s 1998 Form 20-F Filing, 26.
3. Instituto Brasileiro de Siderurgia (IBS), Anuario Estatistico: Brazil Steel Databook (Rio de Janiero, May,
1999), 1/7 and 1/8. [Hereinafter IBS-Anuario Estatistico]
4. Id.
5. Brazil Country Market Analysis, [Hereinafter CMA-Brazil]
6. CADE Report, 17.
7. Id. U.S. Embassy officials in Brasilia have reported to the Department of Commerce that the companies have
appealed CADE’s finding to the Brazilian federal courts. They have not paid the fines imposed by CADE, pending the
appeal.
8. It is interesting to note that price increases for automobile assembly plants did not increase by the same high
percentages, nor at the same rapid pace, as those to other customers. This is due largely to the automobile plants’
larger collective bargaining power.
9. Id.
10. Id.
11. “DCR Assessment Finds The Brazilian Steel Industry Poised for Change,” PRNewswire, May 11, 1999.
12. CADE Report, 12.
13. “DCR Assessment Finds The Brazilian Steel Industry Poised for Change,” PRN Newswire, May 11, 1999.
14. CADE Report, 20.
15. See Chart 3–19 in the Japan section of this chapter.
16. At the same time, opinions regarding the degree of competition that exists among Brazilian producers in the
domestic market are not unanimous. In interviews for this report, officials from various Brazilian investment banks
stated their opinion that Brazilian steel producers are “fiercely competitive.” Interviews with Liberal (Bank of
America) and Bozano-Simonsen by Department of Commerce analysts, December 1999, Rio de Janeiro, Brazil.
17. Joseph J. Innace, “Brazil: World class steelmaking, global growing pains,” American Metal Market, June 23,
1998.
18. As of September 2, 1999, CVRD owned roughly: 10 percent of CSN; 23 percent of Usiminas; 20 percent of
CST; and 2 percent of Acominas. See CMA-Brazil, 29, 43, 54, and 83.
19. Source for cross-ownership chart came from Banco Nacional de Deservolvimento Economico e Social.
20. “Complicated Restructuring Ahead,” Gazeta Mercantil Online, January 20, 2000. Noting that “there are share
investments throughout the [steel] sector,” and that “[Steel] companies are shareholders in other, competing steel
firms, opening the path for possible conflicts of interest.”
21. IBS-Anuario Estatistico.
22. In its 1999 finding of collusion to fix steel prices CADE noted that ordinary flat steel products “cannot be
216 Global Steel Trade: Structural Problems and Future Solutions