Global Steel Trade; Structural Problems and Future Solutions

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vi Global Steel Trade: Structural Problems and Future Solutions
CHAPTER 1 Overview Introduction Over a six-month period in 1998, the U.S. steel industry saw its position in a strong U.S. market severely disrupted as low-priced imports reached all-time record levels. • Imports of hot-rolled steel—the focal point of the crisis—increased over 70 percent from the previous year’s record high, while the average prices of these imports fell nearly 20 percent (Chart 1-1) 1 . • Capacity utilization rates for U.S. producers dropped to 75 percent at year’s end from over 90 percent earlier in the year (Chart 1-2). • While shipments by domestic producers were up slightly in the first half of 1998, they fell 11 percent between the first and second halves of 1998. • Accumulating losses drove six companies into bankruptcy. • Thousands of U.S. steel workers were laid off. It was not until the second half of 1999 that the industry showed signs of recovery: • Prices for a number of steel products are now up from the depressed levels seen in late 1998 and into 1999. Metric Tons (millions) Percent 2.0 1.5 1.0 .5 Total Quantity of Imports 0 Jan 97 July Jan 98 July Jan 99 July Source: ITC Trade Dataweb. 1-1. U.S. Imports of Carbon Hot-Rolled Flat Products, 1997–1999 100 95 90 85 80 75 Average Unit Value of Imports 70 Jan 98 May Sep Jan 99 May Sep Jan 00 May Source: American Iron and Steel Institute. 1-2. Monthly Capacity Utilization Rates $350 $300 $250 $200 Chapter 1: Overview 1
Page 3 and 4: Preface This report is the product
Page 5: Contents Preface ..................
Page 9 and 10: steel prices and still make money (
Page 11 and 12: History of Steel Trade Friction The
Page 13 and 14: • Led by “mini-mill” companie
Page 15 and 16: New Players in the Global Steel Mar
Page 17 and 18: CHAPTER 2 The U.S. Steel Import Cri
Page 19 and 20: The Steel Workers’ Perspective on
Page 21 and 22: 1997: A Cloud Behind Every Silver L
Page 23 and 24: These productivity increases and sh
Page 25 and 26: In mid-1998, financial crisis hit R
Page 27 and 28: concerns regarding purchase allocat
Page 29 and 30: percent from Korea, and 59 percent
Page 31 and 32: from Brazil, Japan, and Russia. 58
Page 33 and 34: finished steel prices is very compl
Page 35 and 36: Department of Commerce determined t
Page 37 and 38: The Role of Trading Companies Tradi
Page 39 and 40: Trading companies viewed these atyp
Page 41 and 42: Weirton, W.V.: A Community Unites i
Page 43 and 44: CHAPTER 3 Behind the Crisis Introdu
Page 45 and 46: Competition has been restrained by
Page 47 and 48: When the Asian economic crisis sapp
Page 49 and 50: The Russian steel industry has made
Page 51 and 52: steel is traded between the world
Page 53 and 54: estructuring of companies and predi
Page 55 and 56: Under the conditions of introducing
Page 57 and 58:
When prices began to escalate after
Page 59 and 60:
pension payments) reached almost 20
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exports extremely profitable, the b
Page 63 and 64:
Trading Companies and the Marketing
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these intermediaries, one source es
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• Domestic demand for hotrolled s
Page 69 and 70:
Although the production facilities
Page 71 and 72:
3.2 Structural Factors and Japanese
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apparent in the marked differences
Page 75 and 76:
High Domestic Prices The apparent c
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outstripped growth in domestic dema
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Noncompetitive Domestic Market and
Page 81 and 82:
Professor Tilton’s price analysis
Page 83 and 84:
The Product Certification System Ad
Page 85 and 86:
Three factors contributed to tippin
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Collapse of Asian Export Markets At
Page 89 and 90:
at a loss. The rationale for pricin
Page 91 and 92:
3.3 Korea’s Steel Industry in The
Page 93 and 94:
negotiations for the purchase of Ha
Page 95 and 96:
almost 700 percent (Chart 3-31). By
Page 97 and 98:
of 1997 and 1998, when capacity uti
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• Regulating POSCO after privatiz
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approximately 32 percent from 1997
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denominated revenue. For other mini
Page 105 and 106:
Rounding Out the Big Three Usiminas
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Chapter 3: Behind the Crisis—Braz
Page 109 and 110:
Import Licensing System Importers m
Page 111 and 112:
they were able to cut their prices,
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CHAPTER 4 U.S. Response to the Cris
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compared to November 1998 and conti
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downstream products. The U.S. indus
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for by the WTO. The industry argues
Page 121 and 122:
Effect of Excess Inventories Much o
Page 123 and 124:
coke but also to the large increase
Page 125 and 126:
The Role of the Chinese Coke Indust
Page 127 and 128:
CHAPTER 5 Reforms and Restructuring
Page 129 and 130:
The current dramatic economic and s
Page 131 and 132:
While this analysis is largely corr
Page 133 and 134:
these four heavyweights will be abl
Page 135 and 136:
Government Initiatives to Encourage
Page 137 and 138:
U.S. Firm Takes Over Hanbo Steel Pr
Page 139 and 140:
ensure that the commercial banks fo
Page 141 and 142:
Again, while these efforts hold pro
Page 143 and 144:
Brazil-IMF Reform Program Throughou
Page 145 and 146:
CHAPTER 6 New Players in the Global
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• Be subject to strong subsidy di
Page 149 and 150:
Technological Backwardness. China
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100 kg at present. Per capita consu
Page 153 and 154:
Current Reform Efforts in the State
Page 155 and 156:
wire rod production with an annual
Page 157 and 158:
Notwithstanding the negative impact
Page 159 and 160:
Media reports and interviews with v
Page 161 and 162:
Baoshan is not equipped to provide
Page 163 and 164:
Domestic Consumption In 1998, Ukrai
Page 165 and 166:
two firms, Enakievo and Konstantino
Page 167 and 168:
• Barter. Ukrainian steel compani
Page 169 and 170:
Today India is the world’s tenth
Page 171 and 172:
among steel-intensive sectors, such
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Banks’ Debt and Equity Exposure D
Page 175 and 176:
Tariffs. High tariff rates also con
Page 177 and 178:
new sales growth. 196 By 1998, even
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CHAPTER 7 Avoiding Future Crises In
Page 181 and 182:
propose to monitor additional data
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determination of dumping. In Octobe
Page 185 and 186:
Engaging Korea On Hanbo In late 199
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Korea Korea’s steel industry has
Page 189 and 190:
New Players: China, Ukraine, and In
Page 191 and 192:
government and private sector assis
Page 193 and 194:
Notes Chapter 1 1. Difference of av
Page 195 and 196:
massive layoff data shows 9,550 emp
Page 197 and 198:
also possess weaknesses, which the
Page 199 and 200:
64. Ibid., 145-177. 65. Id. Bethleh
Page 201 and 202:
ITC considered numerous factors. On
Page 203 and 204:
104. Harry Thuedaus was recently re
Page 205 and 206:
Frank Markus, Successes and Failure
Page 207 and 208:
Decrepit Steel Plant in the Urals,
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2. WTO. At the time of this report,
Page 211 and 212:
Among those who have written on thi
Page 213 and 214:
line pipe markets, the European and
Page 215 and 216:
97. Merrill Lynch, “Steel Industr
Page 217 and 218:
chaebol to downside risk. This crea
Page 219 and 220:
provided after 1991 by domestic ban
Page 221 and 222:
61. Catholic University of Korea Pr
Page 223 and 224:
acquired on economically viable ter
Page 225 and 226:
date of publication in printed vers
Page 227 and 228:
Producers of iron ore and coke, the
Page 229 and 230:
production may be shut down by the
Page 231 and 232:
56. U.S. government sources. 57.
Page 233 and 234:
79. World Bank-Korea, 12. 80. Seong
Page 235 and 236:
24. 24. “Hard Times for China’s
Page 237 and 238:
60. “PRC To Further Cut Steel Out
Page 239 and 240:
132. In terms of crude steel produc
Page 241:
195. The capacity of the new steel
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