Global Steel Trade; Structural Problems and Future Solutions

from Brazil, Japan, and
Russia. 58 A countervailing duty
petition on imports of these
products from Brazil was filed
at the same time.
• Imports of hot-rolled steel
were found to have been
dumped at substantial
margins in all three
investigations: from 41 to 43
percent for Brazil, 18 to 67
percent for Japan, and 74 to
185 percent for Russia. 59
• The dumped imports of hotrolled
steel were also found
to have injured the U.S.
industry. In its final
affirmative injury
US$ Per Metric Ton
$500
$400
$300
$200
Russia
$100
Jan ’97 Apr Jul Oct Jan ’98 Apr Jul Oct
2-15. Carbon Hot-Rolled Steel, U.S. Import vs. Domestic Prices
determination on hot-rolled steel from Brazil, Japan and Russia, the ITC found that imports from these
countries suppressed prices in the U.S. market.
U.S. firms reported that they generally reduced prices and/or rolled back announced price increases to
avoid losing sales to competitors selling imports from the three subject countries. Despite these cutbacks,
U.S. firms reported losing $423 million in sales. 60
Imports were not the sole factor behind price declines or industry woes. Other factors—including
preexisting problems, increased domestic competition, and the strike at General Motors during the summer
of 1998—played a role as well.
Preexisting Problems. Although 1997 was a good year for the U.S. steel industry, some U.S. companies
were facing problems with start-up operations or were in the midst of modernization efforts that left them
vulnerable to the events of 1998. Adam Ritt, the executive editor of New Steel, cautioned steel makers
against using imports as the sole explanation for the industry’s problems:
Imports set a record last year, and a significant portion of the steel was dumped or otherwise sold
in violation of trade laws. Domestic steelmakers are right to object to unfairly traded imports that
have led them to lay off thousands of workers and idle facilities. They’re right to tell the
government and public how they’ve been injured in campaigns such as Stand Up for Steel.
But in telling this story, we run the risk of allowing steelmakers’ other problems to stay in the
shadows. This would be a disservice to workers, shareholders, and the public. Some of the
companies that are most troubled today, including Acme Metals, Laclede, Geneva Steel, and
Northwestern Steel and Wire, had problems dating to before the current imports crisis. 61
In his editorial, Ritt noted that the rough start-up of Acme’s new thin-slab mill and the incomplete
modernization efforts at Geneva Steel had caused both companies problems prior to the import crisis and
were at least partially to blame for the companies’ current woes. 62
Domestic Competition. Some have suggested that domestic competition between large integrated mills
and more efficient mini-mills 63 was the driving force behind the drop in U.S. steel prices in 1998.
Chapter 2: The U.S. Steel Import Crisis 25
Brazil
Japan
Domestic
Sources: Import prices, average unit values from ITC Trade Dataweb; domestic
prices, Nucor HR Coil List Price.